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Singapore Budget 2016 – A Summary For Companies & Businesses

Budget 2016

PIC Cash Payout reduced to 40% (from 60%) for all purchases made after 1 August 2016
This was good while it lasted. But a 40% discount on IT related purchases is still generous!

Corporate Income Tax (CIT) rebate increased to 50% (from 30%)
If you have a tax payable of $1,000, pay only $500!

Business & IPC Partnership Scheme
Companies that organise their employees to volunteer and provide services to Institutes of Public Character will have a 250% tax deduction on the associated costs involved in doing so.

SG-Innovate 
This new entity will match budding entrepreneurs with mentors, introduce them to venture capital firms, help them to access talent in research institutes, and open up new markets.

Automation Support Package
companies can look forward to receiving support to scale up their automation projects and drive productivity.
The Package will comprise four components:

  1.  A grant of up to $1 million, at up to 50% of project cost, to support the roll-out or scaling up of automation projects.
  2. A new 100% Investment Allowance for automation equipment for qualifying projects.
  3. Improve SME’s access to loans for qualifying projects with increase in government’s risk-sharing from 50% to 70% with participating financial institutions.
  4. Collaboration between IE Singapore and SPRING to help businesses access overseas market when they scale up and internationalise.

Business Grants Portal
Businesses are sometimes daunted and confused by the wide range of Government schemes which are administered by different agencies. So it’s great that the Business Grants Portal will be launched in the fourth quarter of this year, and will be organised along core business needs of capability building, training and international expansion. To provide more convenience, it will also pre-populate details that are available in the @Accounting and Corporate Regulatory Authority (ACRA) database. The Business Grants Portal will start with grants from IE Singapore, SPRING, STB and Design Singapore and progressively include grants from other government agencies.

SME Working Capital Loan
SMEs with cash flow concerns or which wish to continue growing their business can now enjoy support under the new SME Working Capital Loan scheme, for loans of up to $300,000 per SME. Under this three year scheme, the Government will co-share 50% of the default risk of such loans with participating financial institutions, to encourage lending to our SMEs.

Extension of Special Employment Credit (SEC)
Employers will continue to enjoy the SEC for 3 more years (till 2019) for workers aged 55 and above earning up to $4,000 a month. This will cover about 340,000 workers, or 3 in 4 older Singaporean workers. Employers will continue to enjoy up to 8% wage offset for Singaporean workers aged 65 and above, up to 5% for workers aged 60 to 64, and up to 3% of those aged 55 to 59.

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