HR’s guide to Singapore's Budget 2018
Economic transformation is a key theme in Singapore’s plans moving forward, as highlighted in the nation’s 2018 Budget statement.
Minister Heng Swee Keat outlined the details in Parliament yesterday afternoon. The budget sees changes to the Goods and Services Tax (GST) as well as an “SG Bonus” that will see all Singaporeans aged 21 and above receiving a one-off “angbao” of up to S$300 by the end of this year.
Read on for HRM Magazine Asia’s rundown of the key highlights:
- Assistance for companies and workers to continue
The Corporate Income Tax rebate for this year will now be doubled to 40% of tax payable, and capped at S$15,000 (up from the previous cap of S$10,000). The rebate will be extended to the 2019 year of assessment, but at the previous rates of 20% tax payable with a S$10,000 cap.
The Wage Credit Scheme – which co-funds pay raises for Singaporean employees, up to a gross monthly wage of S$4,000 – will be extended for another three years, although the government subsidies will be steadily reduced over that period.
- Upskilling workers
The Singapore government is introducing several measures to help local workers keep up with the changing economy. These include a pilot Capability Transfer Programme to enable the transfer of skills from foreign experts to local trainers and trainees, and an ASEAN leadership programme to support expansion into the region.
The existing Work Trial scheme will also be upgraded into a Career Trial programme that funds workers seeking out new jobs and careers, while the Tech Skills Accelerator will be broadened to include sectors such as manufacturing and professional services, and expanded to train more people in data analytics, artificial intelligence, and other emerging digital skills.
- Digital transformation
Government grants that support the uptake of off-the-shelf technologies will now be merged under the umbrella of a new Productivity Solutions Grant. The new grant will up to 70% of costs incurred by SMEs in adopting such technologies.
Larger organisations seeking to innovate and expand internationally will be served by a new Enterprise Development Grant.
Meanwhile, the Open Innovation Platform will match-make companies with tech firms and research institutes to co-develop digital solutions according to the specific challenges faced by the companies.
- GST changes
From January 1, 2020, businesses providing digital services – such as apps, online subscriptions, or video and music streaming services – will have to pay GST. Business-to-business services, such as accounting and IT, will also be affected.
Additionally, businesses and consumers who purchase imported services from overseas suppliers will have to pay GST if those supplies have no establishments in Singapore.
Businesses can also expected a hike in GST – from 7% to 9% – by the year 2025.
See also: Reactions to Singapore Budget 2018