Budget 2022: S$500 million in immediate business relief, including a one-time cash payment for SMEs most affected by Covid-19 restrictions


SINGAPORE – An A$500 million jobs and business support package, which will provide targeted assistance to workers and businesses hit hard by Covid-19 restrictions and facing slower recoveries, has been announced Friday February 18.

During his Budget 2022 speech to Parliament, Finance Minister Lawrence Wong said that while the overall outlook is positive, he acknowledged that there are segments of the economy that are still struggling.

The new business package will include the following:

SMALL BUSINESS TAKEOVER GRANT

The new grant, which aims to help businesses with their cash flow problems, will provide one-time cash support to small and medium-sized businesses hardest hit by Covid-19 restrictions last year.

Eligible businesses will receive S$1,000 for each local employee, up to a cap of S$10,000 per business. These companies will be notified by the Inland Revenue Authority of Singapore (Iras) from June this year.

To qualify for the grant, companies must be “living” entities physically present in Singapore and registered by December 31 of last year.

They must also have an annual operating income of less than S$100 million, filed with Iras for the 2021 tax year by December 31 last year, or have less than 200 employees. as of December 31 of last year.

They must also belong to one of the following sectors:

  • Food and drink
  • Mobile malls, markets, coffeeshops, food courts and canteens
  • Retail
  • Performing arts and arts education
  • Sports
  • Cinema operators
  • Museums, art galleries and historic sites
  • Indoor playgrounds and other family entertainment centers
  • Tourism, hospitality, congresses and exhibitions

Sole proprietorships and partnerships that are managed by at least one local business owner, but do not hire any local employees, will receive a lump sum payment of S$1,000.

However, he or she must not earn net trading income above S$100,000 deposited with IRAS in the assessment year 2021 on or before December 31 of last year.

JOB GROWTH INCENTIVE EXTENSION

The program, which was first announced in August 2020 and is currently due to end in March this year, will be extended for six months until September.

Under this program, the government provides companies with subsidies for the wages of newly hired local workers.

This latest expansion of the scheme, however, will only cover workers aged 40 and over who have not been employed for six months or more, the disabled and ex-offenders.

More details will be shared by the Department of Manpower at the next Supply Committee debate.

AID TO COMPANIES IN OTHER FORMS

Besides the employment and business support program, Mr. Wong also spoke about managing the immediate concerns of businesses to help them weather the current period of high prices, as a spike in the cost of materials and electricity caused cash flow problems.

To help them, a number of funding schemes will be extended as follows:

TEMPORARY BRIDGE LOAN PROGRAM

The scheme, which was first introduced in March 2020 to provide businesses with access to working capital during the Covid-19 crisis, will be extended for another six months until September 30 this year.

However, the maximum loan amount was revised to S$1 million per borrower from S$3 million previously, while the interest rate cap was raised to 5.5% from 5% previously.

CORPORATE FINANCING PROGRAMS

  • The commercial loan scheme will be extended until September 30 this year with a maximum loan amount of S$5 million per borrower or S$20 million per group of borrowers.
  • The project loan scheme will be extended until March 31 next year with a maximum loan amount of S$30 million per borrower or group of borrowers for national projects.
  • The M&A Loan Scheme will be extended until March 31, 2026 with a maximum loan amount of S$50 million per borrower or group of borrowers

AVIATION SUPPORT PACKAGE

Besides the package, Wong said there will be an extension of targeted assistance for the aviation sector. This will include measures to ensure public health and safety at the airport, as well as to “preserve essential capacities” in the sector.

He added that more details will be announced during the next debate of the Department of Transport’s Supply Committee.

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