AN OVERVIEW

 

(A) Wage and Jobs Support Measures

  1. Extend Jobs Support Scheme (JSS) for Tier 1 & 2 Sectors
  2. Wage Credit Scheme (WCS)

(B) Corporate Income Tax

  1. Carry back relief scheme
  2. Accelerate the write-off of the cost of acquiring plant and machinery
  3. Accelerate the deduction of expenses incurred o renovation and refurbishment (R&R)
  4. 250% tax deduction for qualifying donations
  5. Double Tax Deduction for Internationalisation (DTDi) scheme

(C) Goods and Services Tax

  1. GST for imported goods and services from 2023
  2. GST hike to happen between year 2022 to 2025;

 

Wage and Jobs Support Measures

1)Extend Jobs Support Scheme (JSS) for Tier 1 & 2 Sectors

As announced at Budget 2021 on 16 February 2021, the JSS will be extended for firms in Tier 1 and 2 sectors by up to six months, covering wages paid up to September 2021. This will provide continued support for businesses and workers in sectors that continue to be hard-hit amidst the protracted economic downturn.

Under the extended JSS, support levels will be tapered based on the projected recovery of the various sectors, as follows

TierSectorWages paid from April to June 2021Wages paid for July to September 2021
Tier 1 sectorsAviation, Aerospace and
Tourism
30% JSS10% JSS
Tier 2Food Services, Retail, Marine
& Offshore, and Arts and Entertainment
10% JSS-

2)Wage Credit Scheme (WCS)

The WCS is extended by one year to 2021 with the government co-funding ratio at 15% and the qualifying gross wage ceiling at $5,000.

 

SchemeEnhanced WCS
(as announced in Budget 2020)
Extended WCS
(as announced in Budget 2021)
Qualifying years  2019, 20202021
Level of co-funding
  • 20% of qualifying wage increases in 2019
  • 15% of qualifying wage increases in 2020
  • 15% of qualifying wage increases in 2021
Gross monthly wage ceiling
  • S$5,000
  • S$5,000
Qualifying wage increases
  • Increases in gross monthly wage of at least $50 given to Singaporean employees in the qualifying year, up to a gross monthly wage level of $5,000, will be co-funded.
  • In addition, increases in gross monthly wage of at least $50 given in 2017, 2018 and 2019 up to a gross monthly wage level of $5,000, and sustained in subsequent years of the scheme, will be co-funded.
  • Increases in gross monthly wage of at least $50 given to Singaporean employees in the qualifying year, up to a gross monthly wage level of $5,000, will be co-funded.
  • In addition, increases in gross monthly wage of at least $50 given in 2019 and 2020 by the same employer will continue to be co-funded if they are sustained in 2020 and 2021.

Corporate Income Tax

3)Carry back relief scheme

To continue providing support to businesses, the enhancements to the carry-back relief scheme for YA2020 will be extended to apply to qualifying deductions for YA2021, with the same parameters.

Under the enhanced scheme, current year unabsorbed capital allowances (“CA”) and trade losses (collectively referred to as “qualifying deductions”) for YA2021 may be carried back up to three immediate preceding YAs, capped at $100,000 of qualifying deductions, subject to conditions.

Taxpayers were allowed to elect to carry back to the relevant preceding YAs an estimated amount of qualifying deductions available for YA2021, before the actual filing of their income tax returns for YA2021.


4) Accelerate the write-off of the cost of acquiring plant and machinery

Taxpayers who incurred capital expenditure on the acquisition of P&M in the basis period for YA2022 (i.e. financial year (“FY”) 2021) will be given an irrevocable option to accelerate the write-off of the cost of acquiring such P&M over two years.

The rates of accelerated CA allowed were as follows:
a) 75% of the cost incurred to be written off in first year (i.e. in YA2022); and
b) 25% of the cost incurred to be written off in second year (i.e. in YA2023).

The option above was in addition to the options currently available under Section 19 and 19A of the Income Tax Act (“ITA”).

No deferment of CA claims was allowed under the above option. This meant that if a taxpayer opted for the accelerated write-off option, it would need to claim the capital expenditure incurred for acquiring P&M based on the rates of 75% (in YA2022) and 25% (in YA2023).

5) Accelerate the deduction of expenses incurred on renovation and refurbishment (R&R)

Taxpayers who incurred qualifying expenditure on R&R during the basis period for YA2022 (i.e. FY2021) for the purposes of their trade, profession or business were given an irrevocable option to claim R&R deduction in one YA (i.e. accelerated R&R deduction). The cap of $300,000 for every relevant period of three consecutive YAs applied.

The option above was in addition to the existing option under Section 14Q of the ITA.

6)250% tax deduction for qualifying donations

Donors are eligible for a 250% tax deduction for qualifying donations made to Institutions of a Public Character (“IPCs”) and other qualifying recipients from 1 January 2016 to 31 December 2023

Corporate Income Tax

7)Double Tax Deduction for Internationalisation (DTDi) scheme

Under the DTDi scheme, businesses are allowed a tax deduction of 200% on qualifying market expansion and investment development expenses, subject to approval from Enterprise Singapore or Singapore Tourism Board (“STB”).

No prior approval is required from Enterprise Singapore or STB for tax deduction on the first $150,000 of qualifying expenses incurred on the following activities for each YA:

  1. Participation in overseas market development trips/missions;
  2. Participation in overseas investment study trips/missions;
  3. Participation in overseas trade fairs; and
  4. Participation in approved local trade fairs.

To continue supporting internationalisation efforts of businesses amid changes in the business environment, the scope of the DTDi scheme will be enhanced to cover the following specified expenses incurred to participate in approved virtual trade fairs:

  1. Package fees charged by event organisers for virtual exhibition hall and booth access, collateral creation, business meeting/match sessions, pitches/product launches/speaking slots, webinar/conference, and post event analytics;
  2. Third-party costs for design and production of digital collaterals and promotion materials for virtual fairs; and
  3. Logistics costs incurred to send materials/samples overseas to potential clients met at virtual trade fairs.

The list of qualifying expenses for overseas investment study trips will also be expanded to include logistics costs to transport materials/samples used during the investment trips.

In addition, the scope of qualifying activities which do not require prior approval from Enterprise Singapore or STB will be enhanced to cover the following additional activities, up to the current annual expense cap of $150,000:

  1. Product/service certification (primarily to increase buyer’s acceptance in overseas markets) approved by Enterprise Singapore;
  2. Overseas advertising and promotional campaign;
  3. Design of packaging for overseas markets;
  4. Advertising in approved local trade publication; and
  5. Participation in virtual trade fairs approved by Enterprise Singapore.

 

The above enhancements will take effect for qualifying expenses incurred on or after 17 February 2021.

Enterprise Singapore will provide further details of the changes by 28 February 2021.

Goods and Services Tax

8)GST for imported goods and services from 202

From 1 Jan 2023, GST will be imposed on:-

      1. All low-value goods imported via air or post that are valued up to and including the current GST import relief threshold of S$400.
      2. Business-to-consumer (B2C) imported non-digital services (e.g. those involving live interactions with overseas providers of fitness training, counselling and tele-medicine).

9)GST hike to happen between year 2022 to 2025

GST was first implemented in Singapore at a low rate of 3% on 1 April 1994. The GST rate was subsequently raised to 4% in 2003, 5% in 2004 and remained at 7% since 2007.

To support the recurrent needs from healthcare, security and other social spending, the Minister has announced that the government plans to raise GST by 2% points, from 7% to 9%, between year 2022 to 2025, sooner rather than later. The exact timing of the GST increase will depend on the state of the economy, growth in expenditure and buoyancy of existing taxes.

The Minister also announced that the GST increase will be implemented in a progressive manner and the government will:

      • ontinue to absorb GST on publicly-subsidised education and healthcare
      • Enhance the permanent GST Voucher scheme when the GST is increased, in order to provide more help to lower-income households and seniors
GST