On 23rd February, 3.30pm, the final updates to the Singapore Budget 2015 was announced. This year’s Budget may be a boon or bane, but we know that it will be a cause for celebration for certain individuals and groups such as older Singaporeans, firms (particularly SMEs), and middle-income families.
We’ve put together the key initiatives affecting businesses and employees in this infographic. Click to view. Feel free to share it with your colleagues, family and friends. More information on the initiatives can be found below.
1. Enhanced CPF savings
With the income ceiling being raised to $6,000 from next year onwards, this means more CPF savings into your account. If you’re a senior worker aged 55 and above, you will also get an extra 1% interest applied to the first $30,000 of their CPF savings, on top of the current 1% extra interest on the first $60,000 of savings. This essentially means you can earn up to 6% interest on your first $30,000. However, if you are an employer, note the 1% increase in contribution rates.
However, to help companies absorb the cost increase, the Temporary Employment Credit will be extended by two years. The credit will also be raised to 1% of wages instead of 0.5%.
2. Re-employment of mature workers
In addition to the TEC, 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 8.5% wage offset that employers would receive in 2015. This is to further encourage the re-employment of older, highly-experienced workers.
3. SkillsFuture scheme
SkillsFuture is Singapore’s brainchild to develop Singaporean citizens with lifelong skills, knowledge, and expertise in every field. That said, every Singaporean aged 25 and above will be entitled to a SkillsFuture credit of $500 next year onwards. The Government will continue to top up the credits regularly and credits do not expire. In addition, a series of awards will be given to Singaporeans seeking to develop deep specialist skills required for future growth clusters – this targeted support may be beneficial to many Singaporeans who have a clear career progression plan.
Under the SkillsFuture Leadership Development Initiative, collaborations with strategic companies will be stepped up, to develop a pipeline of Singaporeans to take on corporate leadership roles and responsibilities.
4. Personal income tax rebate
About 1.5 million middle-income taxpayers will soon be able to benefit from a one-off 50% tax rebate capped at $1,000. This is for YA 2015 for income earned in 2014.
5. More affordable and quality childcare
For working parents, you’ll be pleased to know that the Government has introduced a new Partner Operator (POP) scheme. With this in place, child care operators on the scheme will be responsible in keeping childcare fees affordable, and develop the skills of their teachers so as to enhance the quality of education/care provided. Child Development Accounts (CDAs) will also be topped-up by the Government in 2015.
6. Higher tax deductions for donations
Donations made this year will now be eligible for tax deductions of 300%, from 250% last year.
7. Wage Credit Scheme for firms
The Wage Credit Scheme (WCS) will be extended through 2017, but at half the rate of subsidy. For the next two years, the Government will co-fund 20% of wage increases for Singaporean employees earning S$4,000 per month and below. This will apply for wage increases given in 2015 that are sustained until 2017.
8. Corporate income tax rebate
The 30% of tax payable will be extended through year of assessment 2017, but the cap will be lowered to a cap of S$20,000 per year. The reduced cap will ensure that more support is focused on SMEs.
9. Firms going global
The Government has established three new measures to help local firms internationalize.
One way is to increase the support level for small and medium enterprises (SMEs) for all activities under IE Singapore’s grant schemes from 50 per cent to 70 per cent.
Secondly, the Double Tax Deduction for Internationalisation scheme will now cover salaries incurred for Singaporeans who are posted for work overseas.
Thirdly, a new International Growth Scheme (IGS), a tax incentive, will provide support to larger local companies to enjoy a 10% concessionary tax rate on their incremental income derived from qualifying activities.
10. Non-extension of PIC bonus
It seems like the bonus will not be extended after this year, so if you’re a business looking to take advantage of it, make sure to do so before it expires. Businesses will continue to benefit from the PIC scheme which has been extended till YA 2018, and the PIC+ scheme.
11. Capability Development Grant
Increased support to companies will be extended to March 31, 2018 for the Capability Development Grant. Up to 70% of costs may be subsidised. Furthermore, the application for the grants will be made simpler for projects below $30,000.
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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