On or about 16 Feb 2021, Deputy Prime Minister and Minister for Finance, Mr. Heng Swee Keat has in his Budget Statement for the Financial Year 2021 make the following tax changes announcement, The full Budget Speech package is available at the Singapore Budget website.
Jobs Support Scheme (JSS)
The extension of the Jobs Support Scheme (JSS) in Tier 1 and 2 sectors for up to 6 months, covering wages paid from April 2021 to September 2021. The subsidies will be tapered based on the projected recovery by industry sectors as follows:
- Tier 1 sectors (e.g. Aviation, Aerospace and Tourism) that are currently receiving 50% JSS support, will receive 30% JSS support for wages paid from April to June 2021, and 10% JSS support for wages paid from July to September 2021.
- Tier 2 sectors (e.g. Food services, Retail, Marine and offshore, and Arts and entertainment) that are currently receiving 30% JSS support, will receive 10% JSS support for wages paid from April to June 2021.
- Tier 3A sectors currently receive 10% JSS support for wages paid from September 2020 to March 2021. JSS support will cease thereafter.
- Employers which are not allowed to resume on-site operations currently receive Tier 1 JSS support for wages paid up to March 2021. For wages paid from April 2021 onwards, JSS support will revert to the firms’ base JSS tier.
Wage Credit Scheme (WCS)
The Wage Credit Scheme (WCS) will be extended by one year to 2021, with the government co-funding ratio of 15% and the qualifying gross wage ceiling at $5,000.
The WCS was first introduced in the 2013 Budget to encourage employers to share productivity gains with workers by co-funding wage increases of at least $50 given by employers to Singapore citizen employees who earned a gross monthly wage of up to $4,000.
In Budget 2020, the gross monthly wages ceiling for co-funding was raised from $4,000 to $5,000 for the years 2019 and 2020. The co-funding ratios were also increased from 15% to 20% for the year 2019 and from 10% to 15% for 2020. The wage ceiling for co-funding remains at $5,000 for the extended period.
For eligible businesses, gross monthly wage increases (at least $50) previously given in 2019 and 2020 by the same employer will continue to be co-funded if they are sustained in 2020 and 2021.
Jobs Growth Incentive (JGI)
The Jobs Growth Incentive (JGI) scheme will be extended by seven months.
The JGI was introduced in Budget 2020 to support employers in accelerating the pace of hiring of local employees from September 2020 to February 2021. With the extension, the eligible companies that hire locals between March 2021 and end-September 2021, subject to meeting the JGI qualifying criteria in each month, will receive wage support as follows:
- 25% on first $5,000 of gross monthly wages paid to non-mature locals hire (below 40 years old), up to 12 months from the month of hire, if the employers continue to meet the eligibility criteria.
- 50% of the first $6,000 ($5,000 previously) of gross monthly paid to mature workers (aged 40 & above), persons with disabilities and ex-offenders, for up to 18 months (12 months previously). Eligible businesses that had hired such locals between September 2020 and February 2021 will enjoy the enhanced support from March 2021.
Source: IRAS, 17 February 2021