Extravagant and fancy gelish nail manicures and pedicures have become so commonplace nowadays that every other Singaporean “Influencer” on Instagram…
With Singapore having 90 confirmed cases of coronavirus (as of 24 February), one of the highest in the world, one of the main focuses of the Singapore government while presenting the budget for the year 2020 was how to tackle the economic impact of the Coronavirus outbreak. To that end, they have taken a slew of measures aimed to dampen its effect on the Singaporean economy. In this article, we’ll be focusing on what these measures are and how they impact your household, business and the sectors that’ve been most affected by this outbreak such as tourism, aviation, retail, food services etc.
Given that the outbreak of coronavirus has brought a lot of uncertainty and impacted the livelihood of businesses negatively, the Singapore government has decided to provide a one off cash payment of 100-300 to all Singaporeans. The exact amount of cash payment will depend on the individual’s income and homeownership. Typically, those with an income of up to $28,000 for 2019 will get $300 while those earning between $28,001 and $100,000 get $200. Those earning over $100,000 or who own more than one property will get $100. Additionally, parents with one or more Singaporean children aged 20 and younger in 2020 will each also get an extra $100 in cash. This cash payment can hopefully work towards offsetting rising expenditures and greater pressures that families are facing. Apart from providing individuals with cash payments, the Singapore government is also extending the service and conservancy charges rebate, which is normally between 1.5 and 3.5 months, by another year. Service and conservancy charges are monthly expenses paid by the lessees and tenants of HDB flats, shops and food stalls for the maintenance of the common property.
|Income bracket||Cash payment|
|0 – 28,000||300|
|28,001 – 100,000||200|
|Above 100,000 or own more than 1 property||100|
Furthermore, the Singapore government has also decided to double its regular GST U-Save rebate voucher. GST U- Save rebate voucher are distributed by Singapore government to help citizens offset some of their utility bill and household expenses. Typically, 1 and 2 room households receive a rebate of $400 while 3 room, 4 room and 5 room households receive rebates of $360, $320 and $280 respectively. For this year, this amount will go upto 800 for 1 and 2 room households and 720, 640 and 560 SGD for 3, 4 and 5 room households. Additionally, Singaporean household with large families (families with 5 or more members) will receive 2.5 times their regular GSTV-U-Save rebates for the year 2020.
Regular GSTV – U-Save
GSTV – U-Save Special Payment for all eligible households
Further GSTV – U-Save for larger households
Total GSTV – U-Save for FY 2020
|1- and 2-room||$400||+$400||+$200||$800 or $1,000|
|3-room||$360||+$360||+$180||$720 or $900|
|4-room||$320||+$320||+$160||$640 or $800|
|5-room||$280||+$280||+$140||$560 or $700|
|Executive / Multi-Generation||$240||+$240||+$120||$480 or $600|
Moreover, the Singapore government will also give a $100 top-up to the Passion cards of all Singaporeans aged 50 and older. This top-up can be used to pay for groceries, activities and facilities at community clubs among other things. To top it all, the government has also decided to provide all Singaporeans aged 21 and older living in one- or two-room HDB flats and not owning more than one property $100 in grocery vouchers in 2020 and 2021. The Singapore government hopes that such economic subsidies will work towards dampening and minimizing the negative effects of Covid-19 on households.
To support businesses, the Singapore government has decided to focus its efforts on two fronts: helping businesses with their cash flows and cover wage costs. For helping businesses with their cash flows, the government has decided to offer a 25 % corporate income tax rebate for 2020. This rebate will be capped at $15,000 per company. Moreover, to help small and medium-sized enterprises access their financing capital needs, the Enterprise financing scheme’s working capital loan will raise its maximum loan quantum from 300,000 to 600,000 and increase the government’s risk share to 80% from the current risk share of 50%.
To help businesses with covering the cost of wages, the government has chosen to enhance two existing schemes – the Jobs Support Scheme and the Wage Credit Scheme. Under the new Jobs Support Scheme, the government will offset 8% of Singaporean citizens and permanent residents employees’ wages. This support will be capped at $3,600 per month for a total of three months. The government will also enhance the Wage Credits scheme, which co-funds wage increases for Singaporean employees, such that the monthly wage ceiling for qualifying wage increases will increase from $4,000 to $5,000. The government has also decided to raise co-funding levels for 2019 and 2020 by five percentage points to 20 per cent and 15 per cent respectively. This move will cost the government about 1.1 billion dollars and go to 90,000 enterprises and benefit 700,000 Singaporean employees.
To offset the losses suffered by Singapore’s most hard-hit sectors, the government has decided to focus its support on providing additional support to these sectors in their operating costs and cash flow and reskill existing workers.
To achieve these strategic objectives, the government has decided to increase its funding support for these sectors under the Adapt and Grow initiative from the existing three sectors to six months. This will involve retraining more than 330,000 local workers. Additionally, the government has offered to provide a 30% property tax rebate to components of licensed hotels and serviced apartments along with conventions and exhibitions avenue. A 15% tax rebate will also be provided to international cruise and regional ferry terminals and a 10% property tax rebate will be provided to the integrated resorts.
To dampen negative effects on the retail and food industry as well as the aviation industry, the government has provided for a 15% tax rebate on retail and food tenants at Changi airport. Additionally, there’ll be rental waivers provided to National Environment Agency managed hawker centres. Furthermore, A the government will also provide a 15 per cent property tax rebate to those who operate in qualifying commercial properties. With these long list of tax rebates, the government is hoping that businesses can revive in the short run and hopefully make up their losses in the future once the Covid-19 outbreak subsides.
With the 2021 elections just around the corner, many have already touted this as goodies galore and election budget. While there’s no doubt that swift government response was needed to increase confidence in the Singapore economy, only time will tell if this response was adequate.