COVID-19: Schemes, grants and reliefs

23 minute read
11 May 2020

The COVID-19 pandemic has greatly impacted our global economy, as companies around the world continue to face pressure in the break of international supply chains, disruptions to manufacturing, cash flow issues and labour shortages.

As a small and open economy that is highly integrated with the global economy, Singapore suffered its biggest contraction in a decade in the first quarter of 2020, as the COVID-19 pandemic prompted the Singapore Government to cut its full-year gross domestic product forecast and plan for a deep recession. In an effort to continue to support the Singapore economy, the Singapore Government had, on 26 March 2020, announced a supplementary budget to Budget 2020, titled the Resilience Budget. The Resilience Budget sought to introduce measures worth over S$48 billion to support workers, help enterprises, and strengthen economic and social resilience. On 6 April 2020, the Singapore Government announced additional measures under the Solidarity Budget to provide further financial support to businesses, in particular with labour and rental costs. On 21 April 2020, in line with the extension of the circuit breaker period until 1 June 2020, the Singapore Government announced that they will enhance existing measures in continued support of people and businesses through the extended circuit breaker. It will be worth noting that in addition to the enhancements to the Government's financing schemes under the Resilience Budget, S$20 billion of loan capital has also been set aside, to support good companies with strong capabilities, and catalyse private sector loan capital where needed. The Monetary Authority of Singapore (MAS) is also working with banks and insurers to see how best to help businesses and individuals facing cash flow challenges with their loan obligations and insurance premium payments. Details of these measures will be announced by MAS and the industry separately. A summary of the key schemes, grants and reliefs that the Singapore Government has introduced to provide assurance and support to workers and enterprises in this time of economic uncertainty, is set out overleaf.

A. Wage and jobs support measures

1. Jobs Support Scheme (JSS)

Effective date/duration: This is applicable for wages for October 2019 to July 2020. This is one of the main subsidies the Singapore Government is giving employers to help retain jobs.

  • Employers will receive a 25% (up from 8%) cash grant on the gross monthly wages of each employee who is a Singapore Citizens or Permanent Resident for the months of October 2019 to July 2020, subject to a monthly wage cap of $4,600 (up from $3,600) per employee.
  • The wage subsidy for all firms will be raised to 75% of gross monthly wages, for the first $4,600 of wages paid in April and May 2020, for each local employee. The Singapore Government has emphasized that with this increased subsidy, it expects employers to refrain from putting employees on no pay leave or retrenching them.
  • The JSS payment will be computed based on CPF contribution data and paid in three tranches from the Inland Revenue Authority of Singapore (IRAS) in April (brought forward from May), end-May/early-June (brought forward from end-July), and end-October 2020 for each respective tranche.
  • Increased grants of 50% and 75% (instead of 25%) are available to specific sectors as set out in paragraph D below.
  • As of 21 April 2020, the JSS payout has been extended to cover wages of employees who are also shareholders and directors of the company with Assessable Income of S$100,000 or less for Year of Assessment 2019. Qualifying employers can expect to receive the JSS payout in May 2020 (which will include back-payment for the first payout in April 2020), and with subsequent JSS payouts.

2. Enhanced Wage Credit Scheme

Effective date/duration: Wage increases in 2019 and 2020

  • The Government will co-fund 20% and 15% of qualifying wage increases for Singapore Citizen employees earning a gross monthly wage of up to $5,000 (up from $4,000) in 2019 and 2020 respectively.

3. Foreign Workers Levy

Effective date/duration: From 24 March 2020. This is applicable for foreign worker levies due in April and May 2020.

  • Foreign worker levy due in April and May 2020 will be waived.
  • Employers will be provided with a foreign worker levy rebate of $750 for each work permit or S pass holder, based on previous levies paid in 2020.
  • SMEs will have up to five months (up from two months) to pay for the foreign worker levy from the month it is incurred, before revocation action kicks in. This temporary relief measure will apply to levies incurred in 2020. MOM will allow renewals but not new applications of work passes from these firms.
  • MOM will extend the levy waiver period to up to 90 days for foreign workers who are currently on overseas leave, instead of the current 60 days. This extended period of levy waiver will also apply to employers who send their foreign workers home from now until end 2020.

B. Cash flow, cost and credit support measures

1. Temporary Bridging Loan Programme

Effective date/duration: 1 April 2020 - 31 March 2021

  • The Temporary Bridging Loan Programme, which is administered by Enterprise Singapore, has now been expanded to cover enterprises from all sectors, which had previously only applied to enterprises from the tourism sector. The maximum supported loan quantum has also been increased to $5 million, from a loan quantum of $1 million previously announced in Budget 2020. The Singapore Government will provide 90% risk-share on applications made between 8 April 2020 to 31 March 2021. The maximum repayment period remains at five years, with interest rates capped at 5% per annum. Enterprises may request for deferment of principal repayment for one year, subject to further assessment by the relevant PFIs.
  • It is worthwhile to note that enterprises can apply for the Temporary Bridging Loan Programme alongside the other loans under the Enterprise Financing Scheme, if criteria are met, and subject to assessment by the relevant PFIs.

2. Income tax deferment

Effective date/duration: This is applicable for income tax payments by companies due in April to June 2020

  • Income tax payments are automatically deferred for three months for companies and self-employed persons, in an effort to help with the cash flow of companies that may be affected by the COVID-19 situation. Therefore, corporate income tax payments will instead be collected in July, August and September 2020, as applicable.

3. Corporate Tax

  • Corporate Income Tax (CIT) Rebate - CIT Rebate of 25% of tax payable, capped at $15,000, will be granted for Year of Assessment (YA) 2020.
  • Tax Treatments under the Corporate Tax System
    1. Companies paying their CIT by GIRO can automatically enjoy an additional two months of interest-free instalments, when they file their Estimated Chargeable Income (ECI) within three months from their Financial Year End. This automatic extension of instalment plan by two more months will apply to:
      1. Companies that file their ECI from 19 February 2020 to 31 December 2020;
      2. Companies that file their ECI before 19 February 2020, and have ongoing instalment payments to be made in March 2020;
    2. Qualifying deductions of up to $100,000 of the unabsorbed capital allowances and trade losses for YA2020 can be carried back up to three immediate preceding YAs, instead of one preceding YA;
    3. Taxpayers will have an option to accelerate the write-off of the cost of acquiring plant and machinery in financial year 2020 (i.e. incurred for YA2021) over two years; and
    4. Taxpayers will also have the option to accelerate the deduction of expenses incurred on renovation and refurbishment in financial year 2020 (i.e. incurred for YA2021) in one year.

4. Property tax rebates

Effective date/duration: This is in relation to property tax payable for the period from 1 January 2020 to 31 January 2020

  • Property Tax Rebate are available for qualifying commercial properties, such as hotels, serviced apartments, tourist attractions, shops and restaurants, have been increased to 100%. Integrated resorts can enjoy property tax rebates of 60%, and all other all other non-residential properties will receive a new 30% property tax rebate.
  • Under the COVID-19 (Temporary Measures) Bill, businesses and individuals will be allowed to defer rental obligations under their tenancy contracts for certain periods, and it shall be compulsory for property owners to pass on property tax rebates they have received to their tenants.

5. Enterprise Financing Scheme

Effective date/duration: 1 April 2020 - 31 March 2021

  • The Enterprise Financing Scheme, together with the Loan Insurance Scheme and the Temporary Bridging Loan Programme, which are administered by Enterprise Singapore, are available to Singapore-based small and medium enterprises (SMEs) and enterprises across all industries.
  • SME Working Capital Loan (EFS-WCL) - The maximum loan quantum was further raised to $1,000,000, from $600,000. For applications made between 8 April 2020 to 31 March 2021, the Government's risk-share was increased to 90%, with a maximum repayment period of five years. Although interest rates are subject to assessment by Participating Financial Institutions (PFI), it should be noted that SMEs may request for deferment of principal repayment for one year, subject to assessment by the PFIs.
  • Trade Loan (EFS-TL) - Enterprises with trade financing needs can apply for financing of short-term import, export and guarantee needs at the maximum loan quantum of $10 million per borrower group, with the Government's risk-share increased from 70% to 90%, for applications made between 8 April 2020 to 31 March 2021. The maximum repayment period remains as one year, with interest rates to be subject to assessment by PFIs.

6. Loan Insurance Scheme

Effective date/duration: 1 April 2020 - 31 March 2021

  • Under the Loan Insurance Scheme, the Government seeks to support SMEs across all industries by managing their trade financing costs, by increasing their subsidy on the loan insurance premiums to 80% (from 50% previously), with the maximum insured period of one year. The maximum loan quantum remains subject to assessment by commercial insurers and PFIs.

7. Freezing of government fees and charges

Effective date/duration: 1 April 2020 - 31 March 2021

  • All government fees and charges for government services are frozen for one year.

8. Rental Waivers

  • Commercial tenants in other government-owned or managed facilities: Given two months of rental waiver (up from half a month) by public agencies such as the Housing Board and the National Arts Council; and
  • Eligible tenants of other non-residential premises: Under the Solidarity Budget, tenants will receive one month of rental waiver by government agencies such as JTC Corporation, Singapore Land Authority, HDB, Urban Redevelopment Authority, Building and Construction Authority, People's Association and National Parks Board.

C. Resilience and recovery measures

1. Enhanced SG Together Enhancing Enterprise Resilience (STEER) Programme

Effective date/duration: 3 March 2020 - 2 March 2021

  • Enterprise Singapore will support funds set up by the Trade Associations and Chambers or industry groupings to help firms tide over economic uncertainties, by matching $1 for every $2 (up from $1 for every $4 w.e.f. 1 April 2020) raised by such industry-led initiatives, up to $1 million per fund.
  • Supportable uses of the fund include grants for business sustenance, business growth, and capability upgrading

2. Enhanced Enterprise Development Grant (EDG)

Effective date/duration: The support level of 80% is applicable from 1 April 2020 - 31 December 2020

  • The EDG is a holistic scheme providing customised support to local enterprises for their growth and transformation by supporting enterprises in undertaking projects in three areas (Core Capabilities, Innovation and Productivity, and Market Access), at a support level of 80% (up from 70%).
  • Unionised enterprises and Employment and Employability Institute (e2i) partners under the Labour Movement can qualify for an additional 10% funding, subject to endorsement from e2i under NTUC.
  • To ensure that the benefits of enterprise transformation are passed on to workers, enterprises will need to commit to improving workers' outcomes (such as wage increment, job creation, job re-design, or training for existing staff) in order to qualify for the EDG.

3. Enhanced Productivity Solutions Grant (PSG)

Effective date/duration: The support level of 80% is applicable from 1 April 2020 - 31 December 2020

The PSG provides funding support to enterprises for the adoption of off-the-shelf productivity solutions and equipment that have been pre-approved by the Government, at a maximum support level of 80% (up from 70%).

4. Enhanced SMEs Go Digital Programme

  • SMEs can receive funding support for the adoption of preapproved digital solutions through the PSG.
  • Expanded scope of pre-approved solutions from 1 April 2020 to 31 December 2020, which will cover online collaboration tools, virtual meeting and telephony tools, queue management systems and temperature screening solutions. Effective date/duration: 1 April 2020 - 31 December 2020
  • 80% funding support for advanced digital solutions adopted from 1 May 2020 to 31 December 2020, for example, advanced security and facilities management systems, and business to-business systems to facilitate end-to-end transactions between buyers and sellers. Effective date/duration: 1 May 2020 - 31 December 2020

D. Support for specific sectors

1. Arts and Culture

  • A S$55 million support package has been introduced to safeguard jobs, retain capabilities, support upskilling and step up digitisation in the sector

2. Aviation

Effective date/duration:

Enhanced JSS: This is applicable for wages for October 2019 to July 2020

Rebates: 1 April 2020 - 31 October 2020

Waiver of LPA charges: 1 April 2020 - 31 March 2021

Deferred Payment of Fees: This applies to fees due to CAAS between 1 April 2020 and 31 March 2021

  • Enhanced JSS: Airlines, ground handling companies and the airport operator will receive grants covering 75% of the gross monthly wages of each Singaporean/ Permanent Resident employee, subject to a monthly wage cap of S$4,600.
  • Enhanced Aviation Support Package:
    1. A S$350 million Enhance Aviation Support Package will be introduced to fund rebates on aircraft landing and parking charges, rental relief for airlines, ground handlers and cargo agents, waivers of the 1% increase in Landing, Parking and Aerobridge (LPA) charges for all airlines and freighter flights.
    2. Support will be given to Singapore carriers to maintain a minimum level of connectivity to (i) allow Singaporeans to return and (ii) for the transportation of goods to keep our supply chains open.
  • Defer Payment of Fees: Civil Aviation Authority of Singapore (CAAS) will allow Singapore carriers and airport operators to defer payment of certain fees (e.g. Certificates of Airworthiness, licenses to provide air services etc.) by up to one year.

3. Construction

Effective date/duration: From 1 April 2020, for six months, subject to further review.

  • MOM has worked together with Singapore Contractors Association Limited (SCAL) and Building and Construction Authority (BCA) on a temporary scheme to refund Man-Year Entitlement (MYE) due to work disruptions from COVID-19. Firms may use the refunded MYE within one year to hire new workers or renew existing ones. Affected firms can apply to BCA for the MYE refund.

4. F&B

Effective date/duration: Rental waiver: March 2020 - June 2020

Enhanced JSS: This is applicable for wages for October 2019 to July 2020

  • Enhanced JSS: Licensed food shops and food stalls (including hawker stalls) will receive grants covering 50% of the gross monthly wages of each Singaporean/ Permanent Resident employee, with the grants increased to 75% of the gross monthly wage paid in April 2020, subject to a monthly wage cap of S$4,600.
  • Stallholders in NEA-managed hawkers centres and markets: Given three months of rental waiver (up from one month), with a minimum waiver of S$200 by the National Environment Agency (NEA)

5. Gig Economy - Self-Employed Person (SEP) Income Relief Scheme

Effective date/duration: Payouts in May, July and October 2020

  • Eligible SEPs will receive a cash payout of $9,000 (consisting of three quarterly cash payouts of $3,000 each in May, July and October 2020).
  • SEPs are eligible if they (i) started work as an SEP on or before 25 March 2020; (ii) do not earn income as an employee, or only earn a small income as an employee; (iii) earn a Net Trade Income of no more than $100,000; (iv) live in a property with an annual value of no more than $21,000; and (v) do not own two or more properties. Married SEPs must meet the additional criteria that (i) the individual and spouse together do not own two or more properties; and (ii) the Assessable Income of his/her spouse does not exceed $70,000.
  • Payouts are automatic for SEPs aged 37 and over who declared positive SEP income to IRAS or CPF Board for Work Year 2018. Other eligible SEPs may make an application.

6. Land Transport

Effective date/duration:

SRF: 14 February 2020 - September 2020

One-time Conversion Waiver: May 2020 - September 2020

Bus Owners Road Tax Rebate: credited to private bus owners in May 2020

Bus Owners Season Parking Fee Waiver: 1 May 2020 - 31 October 2020

  • Point-to-Point Support Package: The S$95 million package introduced includes:
    1. S$78 million will go towards extending the special relief fund (SRF) where taxi and full time private hire car (PHC) drivers will receive S$300 per vehicle per month (i.e. S$10 per day) and taxi operators have pledged rental rebates amounting to a total of S$25 million.
    2. Land Transport Authority will extend the initial waiver of three months of operator licence fees for another six months.
    3. S$12 million will be set aside to help taxi operators defray the costs of their growing un-hired fleet.
    4. PHC owners who leave the scene and convert their cars to normal passenger cars will receive a one-time waiver of S$100.
  • Relief for Private Bus Owners: One-year road tax rebate and a six-month waiver of parking charges at government-managed parking facilities.

7. Malaysian Worker Dependent Industries - Temporary Housing Support for Employers

Effective date/duration: Applications may be submitted from 1 April 2020

  • Eligible employers can apply for temporary housing support of $50 per affected worker per night, capped at 14 nights to cover the extra housing costs incurred. Affected workers refer to workers who:
    1. Are Singapore Citizens, Permanent Residents or Work Pass holders who are Malaysia citizens;
    2. Reside in Malaysia and commute to Singapore; and
  • Are housed in Singapore in hotels, dormitories or rented accommodation between 18 March and 31 March 2020.

8. Manufacturing and Services

Effective date/duration: From 2 March 2020, for 6 months, subject to further review

  • A temporary scheme has been introduced to help companies hire existing PRC Work Permit holders (WPH) who are in Singapore, with the agreement of their current employers. MOM will work with the Singapore Business Federation (SBF) to help facilitate the transfer of PRC Work Permit holders between companies in the same sector. Interested employers can approach SBF for help.

9. Maritime

Effective date/duration:

Port Dues Concession: March 2020 - 31 December 2020

Rebates for rental and berthing: From March 2020, for 3 months, subject to further review

Waiver of public licence fees: This applies to public licence fees for financial year 2019

  • The Maritime and Port Authority of Singapore (MPA) will be giving 50% port dues concession to passenger vessels.
  • Singapore Cruise Centre Pte Ltd has given a 15% rebate to regional ferry operators to offset rental fees for overnight berthing of vessels and counter rental. MPA will provide an additional 35% rebate to these operators.
  • MPA will grant 100% waiver of public licence fees for passenger terminal operators.

10. Tourism

Effective date/duration: Enhanced JSS: This is applicable for wages for October 2019 to July 2020

  • Enhanced JSS: Hotels, travel agents, gated tourist attractions, cruise lines, cruise terminal operators and MICE venue operators will receive grants covering 75% of the gross monthly wages of each Singaporean/ Permanent Resident employee, subject to a monthly wage cap of S$4,600.
  • The Singapore Tourism Board will waive the licence fees for hotels, travel agents and tour guides, and defray cleaning and disinfection cost of hotels.
  • Enhanced Tourism Grants: Maximum support level for qualifying costs will be increased by 10 percentage points for (a) Business Improvement Fund; (b) Local Enterprise and Association Development Programme; (c) Business Events in Singapore; (d) Leisure Events Fund; (e) Kickstart Fund; (f) Experience Step-Up Fund; (g) Cruise Development Fund.

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.