The government has introduced a number of measures aimed at helping businesses through the challenges created by the recent Covid-19 outbreak.
We summarize some of the measures that may have an impact on your business.
- GST Hike Postponed
The government has confirmed that GST will not be raised in 2021.
- Corporate Income Tax (CIT) Rebates
Some tax savings may be available. A Corporate Income Tax rebate of 25% on your company’s tax bill (up to a cap of $15,000), will be granted for Year of Assessment (YA) 2020.
- More interest-free instalments for Corporate Income Tax
Filing your corporate taxes on time can be beneficial. Companies that file their Estimated Chargeable Income (“ECI”) within 3 months of their financial year, may enjoy an additional 2 months’ worth of instalments on their outstanding tax liability. In other words, you get more time to pay what you owe to the government.
- Greater flexibility to “carry back” unabsorbed capital allowances and losses
Up to $100,000 worth of unabsorbed capital allowances and trade losses for YA 2020 can be carried back up to 3 preceding YAs.
- Accelerated write offs for plant, machinery, and renovations, acquired or incurred in financial year 2020.
- Enhanced SME Working Capital loans
Participating banks may be incentivized to lend SMEs money to ease their cashflow concerns. The maximum loan quantum will be raised to $600,000 (up from $300,000), with the government taking up to 80% of the risk.
- Targeted help for certain sectors
Targeted assistance is available to some sectors that are perceived to be more seriously impacted by the ongoing Covid-19 crisis (such as the aviation, tourism, F&B and retail sectors).
- Wage support and other employment incentive schemes
Schemes such as the Jobs Support Scheme, Wage Credit Scheme, and Senior Employment Scheme etc. to incentive firms to retain workers, support wage increases, employ older workers, and to upgrade their skills.
