The Stabilisation and Support Package announced by Deputy Prime Minister and Finance Minister Heng Swee Keat in his 2020 Budget will provide cash flow assistance to enterprises, especially those directly affected by the Covid-19 outbreak.
“First, I will grant a Corporate Income Tax Rebate for year of assessment 2020 at a rate of 25 per cent of tax payable capped at S$15,000 per tax-paying company,” he said in Parliament on Tuesday (Feb 18).
These rebates will benefit all tax-paying companies and will cost about S$400 million.
Enterprises will be allowed a faster write-down of their investments in plant and machinery and renovation or refurbishment work incurred for Year of Assessment 2020. “This will put more cash in the hands of our enterprises,” noted Mr Heng.
The Government will also enhance the Enterprise Financing Scheme’s Working Capital Loan component for one year and raise the maximum loan quantum from S$300,000 to S$600,000. Its risk-share for this initiative will be increased from the current 50 to 70 per cent to 80 per cent.
“With the large part of the risk taken up by the Government, I trust that our financial institutions will do their part to support SMEs,” he said.
Tenants and lessees of Government-managed properties such as those from HDB, STB and STC, could discuss options for more flexible rental payments like instalment plans.
Sectors affected by Covid-19 will receive additional support
The tourism, aviation, retail, food services and point-to-point transport services sectors will receive additional support by the Government through the 2020 Adapt and Grow initiative.
For these sectors, the funding period for reskilling will be extended from three months to a maximum of six months, said Mr Heng. “Together with their jobs support scheme, we will support employers in these sectors to retain and train more than 330,000 local workers.”
Employers from these sectors could use the downtime for training and upskilling to prepare for the recovery, suggested the minister.
Details of the support to be provided per sector:
Tourism sector — A property tax rebate of 30 per cent for the year 2020 will be given for the accommodation and function room components of licensed hotels, serviced apartments and MICE venues.
Furthermore, a Temporary Bridging Loan Programme will be introduced for enterprises in the tourism sector for one year. It will include a loan quantum limit of S$1 million and an interest rate capped at 5 per cent, with the Government taking up 80 per cent risk-share.
Aviation and Retail sector — Measures comprised of rebates on aircraft landing and parking charges, assistance to ground handling agents and rental refunds for shop and cargo agents at Changi Airport will be implemented. There will also be a 15 per cent property tax rebate for Changi Airport.
Food services sector — The National Environment Agency (NEA) will provide a full month of rental waiver for stallholders in NEA-manged hawker centres and market. Other Government agencies like the HDB will offer a half-month rental waiver to its commercial tenants. Qualifying commercial establishments operating in private property will be given a 15 per cent property tax rebate.
“I strongly urge landlords to pass this on to their tenants by reducing rentals,” said Mr Heng.
There will also be a support package given to PTP transport services. “I am heartened to know that many taxi and private-hire car operators have come out strongly to support the initiative by matching the Government’s contribution,” he said.
Mr Heng added that this spirit of partnership is what is needed to weather this challenging period together. “If needed, we can and are prepared to do more,” he promised. /TISG