Incentives and Support for Businesses in Singapore’s Budget 2022

In the second part of our series covering Singapore’s 2022 budget, we look at the incentives impacting businesses.

Singapore’s S$109 billion (US$80 billion) budget provides a variety of new tax measures, such as plans to increase the goods and services tax from 2023 and an increase in personal income tax for those earning more than S$500,000 (US$371,000) from 2024.

The incentives offered to businesses include more than US$300 million in grants, loan schemes, and the expansion of reskilling programs for workers.

Singapore’s Finance Minister Lawrence Wong announced a deficit of S$3 billion (US$2.2 billion) or 0.5 percent of GDP, a decrease from the S$5 billion (US$3.7 billion) deficit in 2021. The country has committed over S$100 billion (US$74 billion) over the last two years to cushion the economic impact caused by the virus, and the government will draw a further S$6 billion (US$4.4 billion) from Singapore’s vast reserve to fund public health measures.

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Recovery is expected to remain uneven, especially for the aviation and tourism industries, which will take longer as concerns over the virus and new variants remain.

The government has prepared S$500 million (US$371 million) for a jobs and business support package.

Under this package, the government has introduced a new small business recovery grant, which provides a one-off cash payment for small and medium-sized enterprises (SMEs) most affected by the pandemic.

SMEs can receive a S$1,000 (US$743) per local employee, up to S$10,000 (US$7,433) per company); and

In addition, the government will distribute S$1,000 (US$743) to SFA-licensed hawkers, markets, coffee shop holders, and local sole proprietors.

The government has extended the jobs growth incentive (JGI) scheme until September 2022. The JGI is a program that helps local businesses expand local hiring by the government paying a portion of the salary of the employee.

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This article was first published by AseanBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected].