Budget 2017: How will businesses be affected?
Budget 2017 provides near-term support measures to deal with sector-specific needs and addresses the strategies recommended by the Committee on the Future Economy. LINETTE HENG looks at how businesses will be affected
FOREIGN WORKER LEVY (FWL) DEFERMENT
- Marine and process sectors to get respite from FWL increase for one more year. Increases will proceed for construction sector, but about $700 million of public sector projects will be brought forward to help construction firms.
Public Sector Construction Productivity Fund, up to $150 million, will be introduced to allow government agencies to procure innovative and productive construction solutions.
LOWER COSTS AND SUPPORT
- Enhanced corporate income tax (CIT) rebate, by raising cap from $20,000 to $25,000 for YA2017. Rebate will remain at 50 per cent of tax payable. CIT rebate will be extended to YA2018, at reduced rate of 20 per cent of tax payable, capped at $10,000.
- SME Working Capital Loan - where the Government co-shares 50 per cent of default risk for loans of up to $300,000 each per small and medium-sized enterprise (SME) - will continue to be available for next two years.
- Special employment credit to support employers who hire older workers. It will cost the Government over $300 million and will benefit more than 370,000 workers.
- Wage Credit Scheme to continue to help firms cope with rising wages. Over $600 million will be paid next month and roughly 70 per cent of it will be to SMEs.
- SMEs Go Digital Programme to help SMEs build digital capabilities. Also in-person help at SME Centres and new SME Technology Hub set up by Info-communications Media Development Authority.
- Up to $600 million in government capital committed for new International Partnership Fund - which co-invests with Singapore-based firms to scale-up and internationalise.
- Global Innovation Alliance for Singaporeans to gain overseas experience. It is a collaboration between educational institutions, economic agencies and businesses. Initial phase to be launched in Beijing, San Francisco and various Asean cities.
HELP FOR JOB SEEKERS AND WORKERS
- New "Attach and Train" initiative for sectors with good growth prospects but where companies may not be ready to hire yet.
- More short, modular courses available and expanded use of e-learning.
- To reduce carbon emissions
- Tax rate of between $10 and $20 each tonne of greenhouse gas emissions to be applied upstream on power stations and other large direct emitters
- Public consultations start next month
NEW VEHICULAR EMISSIONS SCHEME
- To nudge car buyers towards cleaner car models
- May include four other pollutants on top of carbon dioxide
- Replaces current Carbon Emissions-based Vehicle Scheme, which expires on Dec 31, and will run for two years
RESTRUCTURED DIESEL TAX
- To encourage users to reduce diesel consumption
- Government will introduce a volume-based duty at $0.10 a litre on automotive diesel, industrial diesel and the diesel component in biodiesel
- Changes are in immediate effect
EARLY TURNOVER SCHEME
- To encourage people to switch from pollutive commercial diesel vehicles (Euro II and III) to cleaner ones (Euro VI)
- Scheme will be extended to July 31, 2019
NEW ADDITIONAL REGISTRATION FEE TIERS
- The Additional Registration Fees (ARFs) for motorcycles with open market values (OMVs) up to $5,000 will remain at the current 15 per cent. But the next $5,000 of motorcycle OMV will be subject to an ARF rate of 50 per cent. Motorcycle OMV beyond $10,000 will be subject to a rate of 100 per cent. The Ministry of Transport will cease the contribution of motorcycle Certificate of Entitlement quota to the Open category COE quota.