Singapore Budget 2015 in 5 minutes [Infographic]

This is a guest post written by Jesslyn Phoon from Talenox.

A number of schemes and changes were introduced in this year’s Budget. There were broad schemes as well as specific measures aimed at certain groups such as older Singaporeans, businesses and particularly SMEs, as well as middle-income families. 

If you need a quick recap of what the Budget announcements were, we have here an infographic to jog your memory.

The key initiatives affecting businesses and employees have been summarised in the infographic. You are welcome to share it with your colleagues, family and friends. More information on the initiatives is also available below.

 Singapore Budget 2015 Infographic

1. Enhanced CPF savings

The CPF salary ceiling is raised to $6,000 starting from 2016. This means more CPF contributions towards your account.

If you’re a senior worker aged 55 and above, you will also get an extra 1% interest on the first $30,000 of your CPF savings. This is on and above the current 1% extra interest on the first $60,000 of CPF savings. So for the first $30,000, you will be able to earn up to 6% interest.

For employers, this means an additional contribution that you’ll need to make for your employees. To help businesses defray this increase in labour cost, the Temporary Employment Credit (TEC) will be extended by two years. Additionally, the credit will be raised from 0.5% to 1% of wages in 2015.

 

2. Re-employment of mature workers

To further encourage the re-employment of older, highly-experienced workers, the Government will provide employers with an additional Special Employment Credit (SEC) of up to 3% of wages for workers aged 65 years and above in 2015. This is on top of the TEC as well as the 8.5% wage offset that employers can expect to receive in 2015.

 

3. SkillsFuture scheme

SkillsFuture is Singapore’s brainchild to develop citizens who are equipped with lifelong skills, knowledge and expertise in every field.

Under this scheme, beginning from 2016, every Singaporean aged 25 and above will be entitled to a SkillsFuture credit of $500. The credits do not have an expiry and the Government pledges to top up the credits regularly.

In addition, awards will be given to Singaporeans seeking to develop specialist skills in line with the needs of Singapore’s future growth clusters. This targeted support will be beneficial to Singaporeans who plan to become specialists in their field.

Under the SkillsFuture Leadership Development Initiative, there will be stronger and more collaborations with strategic companies. Singaporeans who aspire to become corporate leaders can look to benefit from this scheme.

 

4. Personal income tax rebate

As part of SG50 Jubilee celebration, all individuals who are Singapore tax residents are entitled to a one-off 50% rebate (capped at $1,000) for Year of Assessment 2015.

 

5. More affordable and quality childcare

If you are a working parent, you’ll be pleased to know that the Government has introduced a new Partner Operator (POP) scheme. Under this scheme, child care partner operators will be responsible for keeping childcare fees affordable and for developing the skills of their teachers with the aim of providing quality education/care to young children.

More details were announced recently. A total of 169 childcare centres operated by 23 pre-school partner operators will offer lower fees beginning next year. Under this scheme, full-day childcare fees are capped at $800 per month (before GST).

In addition, Child Development Accounts (CDAs) are topped-up by the Government in 2015.

 

6. Higher tax deductions for donations

Qualifying donations made in 2015 are eligible for 300% tax deduction. From 2016 to 2018, tax deductions for qualifying donations continue to be 250%.

 

7. Wage Credit Scheme for firms

The Wage Credit Scheme (WCS) is extended to 2017, but the rate of subsidy will be halved. For the next two years, the Government will co-fund 20% of wage increases for Singaporean employees earning a gross monthly wage of $4,000 and below. This will apply for wage increases in 2015 that are sustained until 2017.

 

8. Corporate income tax rebate

The 30% corporate income tax rebate is extended through Year of Assessment 2017, but at a reduced cap of $20,000 per year. The reduced cap will ensure that support is focused on helping SMEs.

 

9. Firms going global

The Government has established three new measures to help local businesses internationalise.

The support level for SMEs for all activities under IE Singapore’s grant schemes is increased from 50% to 70% for three years to 31 March 2018.

Secondly, the Double Tax Deduction for Internationalisation scheme also administered by IE Singapore now covers qualifying manpower expenses incurred for Singaporeans who are posted to new overseas entities. This serves to provide stronger support through defraying costs of firms venturing into overseas market.

Thirdly, a new tax incentive, the International Growth Scheme (IGS) provides support to larger local companies who expand overseas. Under this scheme, companies awarded the incentive enjoy a 10% concessionary tax rate on their qualifying incremental income from approved activities.

 

10. Non-extension of PIC bonus

The PIC bonus has come to an end this year but businesses can continue to benefit from the PIC scheme and PIC+ scheme which are extended to Year of Assessment 2018.

 

11. Capability Development Grant

The Capability Development Grant (CDG) is extended to 31 March 2018. Under this scheme, up to 70% of qualifying costs may be subsidised. Furthermore, application for grants will be made simpler for projects below $30,000.

With these changes, more qualifying SMEs can look to tap on the grants available under this scheme. The CDG covers many areas including Brand & marketing strategy development and Productivity improvement.

For more information, you may refer to the Singapore Budget website, where the full Budget statement, the full speech video, and past Budget initiatives can be accessed.

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