Singapore Budget 2021 Summary: An Update for Businesses

The Singapore Budget 2021 was officially announced in February. To continue the support for local businesses, the Budget has extended many tax measures and reliefs in the previous year.

Supporting Schemes

The three major supporting schemes in 2020 (Jobs Support Scheme, Wage Credit Scheme, and Jobs Growth Incentive) are extended in the Singapore Budget 2021.

The Jobs Support Scheme is set to further assist the Covid-hardest-hit sectors. For Tier 1 sectors (tourism and others), the government will continue to co-pay eligible wages paid from April to September 2021 (6 months). Tier 2 sectors will also continue to benefit from the scheme, but for a shorter time (3 months) and with less support.

The Wage Credit Scheme is extended for another year. The government will continue to co-fund 15% of the wage increases given to citizen-employees whose monthly wage is up to $5,000.

As for the Jobs Growth Incentive, it is extended to provide salary support for companies hiring from March 2021 to September 2021. The support is up to 25% of the first $5,000 of gross monthly income for 12 months, for non-mature locals. For mature locals, the support is up to 50% of the first $6000 for 18 months.

Tax Changes

Here is the summary of major tax changes for businesses:

– Corporate tax rebate is not extended in 2021.

– The 250% tax deduction to qualifying donations is extended from 1 January 2022 to 31 December 2023. 

– The enhancement to the Carry-back scheme in YA 2020 is extended to YA 2021.

– The option to accelerate the write-off of the cost of acquiring plants and machinery is extended to FY 2021.

– The option to accelerate the deduction of expenses incurred on renovation and refurbishment is extended to FY 2021.

– GST is extended to cover certain goods imported by air or post and certain non-digital services from business to customers.

– The basis to determine whether media sales are zero-rating for GST purposes has been changed.

– The Double Tax Deduction for Internationalisation scheme receives some enhancements.

–  Refinement and extension applies to the double tax deduction (“DTD”) for qualifying upfront cost attributable to retail bonds issued under MAS’ Seasoning Framework and Exempt Bond Issuer Framework 

– Withholding tax exemptions are extended and justified for the financial sector and its products. 

– The Not-for-Profit Organisation (“NPO”) tax incentive is extended to the end of 2027.

– The Automation Support Package is announced to lapse after 31 March 2021.

– The Investment Allowance Energy Efficiency scheme is renamed (to Investment Allowance for Emissions Reduction scheme), enhanced, and extended (to the end of 2026).

– The Insurance Business Development-Specialised Insurance scheme is announced to lapse after 31 August 2021.

– The ADA-PCE scheme is announced to be withdrawn from 17 February 2021.

– The Business and IPC Partnership Scheme is extended to the end of 2023.