-
Budget 2018
-
Budget 2018
4 Key Areas SMEs should know about Budget 2018
Everyone is talking about the impending higher GST (that will be on the horizons in 3 to 7 years’ time), we want to highlight the things that, we think, will matter more to Small and Medium Enterprises (SMEs). Here are 4 key areas that you should be aware of regarding Budget 2018:
1. Key Cost Subsidies
a. Extension of Wage Credit Scheme (WCS)
The WCS co-funds wage increments for Singaporean employees, up to S$4,000 gross monthly wage. The WCS will be extended by 3 years, where there will be 20% co-funding for 2018, 15% for 2019 and 10% for 2020.
b. Corporate Income Tax (CIT) Rebate
For Year of Assessment (YA) 2018, the CIT rebate will be raised to 40% of tax payable, capped at S$15,000. For YA 2019, the rebate will be at 20% of tax payable, capped at S$10,000.
c. Start-up Tax Exemption (SUTE)
SUTE is aimed at helping smaller firms and start-ups lower costs, but it does not directly help firms develop capabilities. Hence, starting in YA 2020, instead of being exempted 100% for the first S$100,000 of chargeable income from corporate tax, the exemption will be reduced to 75%.
d. Foreign Worker Levy
Good news for those in the Marine Shipyard and Process sectors that are still currently facing weakness, the earlier-announcement of increase in Foreign Worker Levy rates will be deferred by another year.
View the updated table of Foreign Worker Levy Schedule.i
2. Grants you should be aware of
a. Productivity Solutions Grant (PSG)
To support businesses in procuring and using new solutions, the existing grants will be streamlined to support the adoption of pre-scoped, off-the-shelf technologies into a single grant termed the Productivity Solutions Grant (PSG). PSG will provide funding for up to 70% of the qualifying costs for SMEs seeking to adopt these off-the-shelf technologies with a defined scope. The new grant will come into effect from April 1, 2018.
b. Enterprise Development Grant
For larger companies which need help to innovate and internationalise, the Enterprise Development Grant (EDG) will combine the existing Global Company Partnership grant by IE Singapore and Capability Development Grant by SPRING. The new grant will provide up to 70% co-funding for companies to build a range of capabilities. This will help companies to compete better both locally and abroad. EDG will be administered by Enterprise Singapore (ESG).
c. PACT scheme
The PACT scheme aims to provide more “holistic support” to encourage collaboration between enterprises of all sizes. PACT will provide funding support up to 70% of qualifying costs in areas such as capability upgrading, business development and internationalisation. PACT will be administered by Economic Development Board (EDB) and ESG.
3. Business Opportunities and Internationalisation
a. Open Innovation Platform
This is a virtual crowd-sourcing platform, where companies can list specific challenges that they are seeking to solve through digital solutions. For providers of digital solutions, this provides an opportunity to find partners to co-develop solutions that help solve real-world problems.
b. ASEAN Leadership Programme
Under the Leadership Development Initiative (LDI), 2018 will see the birth of a new ASEAN Leadership Programme to help our business leaders build networks and plan business expansion in Southeast Asian markets. More details are expected in April, ahead of its launch in the second half of the year.
c. Infrastructure Office
To help firms tap into infrastructure opportunities in Asia, such as those created by China’s One Belt One Road initiative, the government will setup an Infrastructure Office. The Office will bring together local and international firms from across the value chain, such as developers, investors, legal, accounting and financial service providers – to develop, finance and execute infrastructure projects.
a. Tax Deduction for IP registration fees
Tax deduction for IP registration fees will go up from 100% to 200%, to help firms protect tangible assets. The deduction is capped at S$100,000 of IP registration fees per year.
b. Tax Deduction on qualifying expenses on R&D
For qualifying expenses on R&D done in Singapore, the tax deduction is raised from 150% to 250%.
c. NRF-Temasek IP Commercialisation Vehicle
Over S$100 million will be invested into this joint venture. This brings together Temasek’s global investment networks with NRF’s connections from the Singapore R&D community, this is aimed to help grow companies that draw on IP from publicly-funded research in Singapore.
d. Aviation Transformation Programme (ATP)
The ATP will be launched to build up Singapore’s R&D capabilities to address challenges arising from increased air traffic and constraints in manpower, which currently impacts both land and airspace. Key thrusts will be focused on:
i. Seamless ground operations
ii. Effective and efficient security
iii. Premium travel experience
iv. First-in-class Air traffic management
The ATP will be administered by Civil Aviation Authority of Singapore (CAAS).
e. National Robotics Programme (NRP)
The NRP was launched in Budget 2016 to address labour constraints in sectors such as healthcare and cleaning. This year, the NRP will be expanded to cover the building environment and construction sectors, to transform work processes in areas such as Design for Manufacturing and Assembly (DfMA) and create better job opportunities. The NRP for the building environment and construction sectors will be administered by Building and Construction Authority (BCA).
With innovation and collaboration at the heart of this year’s budget, the government is positioning SMEs to be ready for the future amid a changing global economic landscape, which is critical for our nation’s development in the next decade.
Follow StarHub Business on Linkedin for the latest business updates.
