Helping businesses transit, strengthen capabilities and foster successful partnerships
Businesses to receive over S$1.4b in near term support, S$2.4b to implement CFE strategies.
20 Feb 2017
Amid continued cyclical and structural changes, the Singapore Government has announced several measures in this Budget to help businesses transit, build up capabilities and foster successful partnerships.
Deferring foreign worker levy:
The Foreign Worker Levy (FWL) increases in the Marine and Process sectors will be deferred by an additional year, in light of ongoing weaknesses in the two sectors.
Acceleration of infrastructure projects:
The Government will bring forward S$700 million worth of public sector infrastructure projects to begin in FY2017 and FY2018.
Enhanced tax rebate:
for the broader economy, the Government will enhance the Corporate Income Tax (CIT) Rebate by raising the cap from S$20,000 to S$25,000 for YA2017, and will extend it for another year to YA2018, at a reduced rate of 20% of tax payable, capped at S$10,000.
Range of support for businesses:
Eligible businesses, especially SMEs, will continue to receive help in coping with rising wages through the Wage Credit Scheme and the Special Employment Credit. To provide more support for firms hiring older workers, MOM will raise the re-employment age from 65 to 67 years, with effect from 1 July 2017. This will apply to workers younger than 65 on that day.
For workers who lie outside the above category, the Government will extend the Additional Special Employment Credit till end-2019. Under this scheme, employers will receive wage offsets of up to 3% for workers who earn under S$4,000 per month and who are not covered by the new re-employment age of 67 years old. Taken together with the Special Employment Credit, employers will receive support of up to 11% for the wages of their eligible older workers.
These additional near term support measures, along with the existing Wage Credit Scheme and Special Employment Credit, will give businesses support of over S$1.4 billion over the next year.
STRENGTHENING BUSINESSES’ CAPABILITIES
Three capabilities were earlier highlighted by the Committee on the Future Economy (CFE) report as being crucial for many firms– being able to use digital technology, embracing innovation, and scaling up globally. Budget 2017 will include measures to build these capabilities.
Helping SMEs adopt digital solutions:
The Info-communications Media Development Authority (IMDA) will work with SPRING and other sector lead agencies to introduce the SMEs Go Digital Programme, which will provide SMEs with advice and funding support to pilot emerging ICT solutions.
The Government will continue to support firms in their efforts to tap on innovation and technology. For example, A*STAR will continue to advise businesses on how technology can aid them, and now also provide access to advanced, specialised equipment, and user training under a new Tech Access Initiative.
The Headstart programme, where SMEs that co-develop Intellectual Properties with A*STAR get to enjoy royalty-free and exclusive licences for 18 months, will have its duration extended to 36 months.
Help businesses scale up globally:
The Government will commit up to S$600 million in Government capital for a new International Partnership Fund. The Fund will co-invest with Singapore-based firms to help them scale-up and internationalise.
The Government will also enhance its schemes to bridge current gaps in financial markets for project finance for infrastructure development in Asia.
For one, IE Singapore’s Internationalisation Finance Scheme will be enhanced. The Government will catalyse cross-border project financing for both smaller and larger infrastructure developers by co-sharing the default risk of lower quantum non-recourse loans, and providing a share of the needed sovereign risk insurance coverage. Overall, these enhancements will enable more companies to take on more overseas projects.
FOSTERING SUCCESSFUL PARTNERSHIPS
Industry Transformation Maps (ITMs) will be developed for 23 sectors, covering about 80 per cent of Singapore’s economy. Six have already been launched, with the remaining 17 to debut within FY2017.
Regulatory agencies will further explore how they can facilitate innovation and procure products and services in a way that builds capabilities in the economy and supports innovation.
Research and productivity boosts:
The Government will top up the National Research Fund by S$500 million, to support innovation efforts, and the National Productivity Fund by another S$1 billion, to support industry transformation.
In all, the Government is putting aside S$2.4 billion over the next 4 years to implement the CFE strategies. This will be over and above the S$4.5 billion set aside last year for the Industry Transformation Programme.