How the Singapore Budget 2018 will impact the workforce?
With the announcement of Budget 2018, Finance Minister Heng Swee Keat emphasised the Singapore government’s commitment to developing a vibrant and innovative economy, helping firms and workers overcome near-term challenges as well as to seize future opportunities.
As the dust settles on the annual announcement, we take a step back to examine just how some of these new initiatives – of over S$600 million in investment – will stand to benefit the country’s workforce as they come into play.
Support for near-term challenges
The Government will be extending the Wage Credit Scheme for another three years, along with an enhanced Corporate Income Tax rebate, to 40% of tax payable, capped at S$15,000.
Marine and Process sectors currently experiencing a manpower crunch will benefit from the deferment of the Foreign Worker Levy for another year. As part of the ongoing shift towards continuous education, Singaporeans will stand to benefit from Adapt and Grow Initiatives by re-skilling to enter markets with greater job growth potential.
Fostering pervasive innovation as the new normal
Following the expiry of the Production and Innovation Credit (PIC) scheme, the Productivity Solutions Grant (PSG) will take its place to provide small and medium-sized enterprises with funding support up to 70% of qualifying costs for off-the-shelf solutions.
Higher tax deduction on intellectual property licensing payment of up to 200%, capped at S$100,000 per year, provides subsidies for the commercial use of intellectual property that scales according to cost. Similarly, intellectual property registration fees are now entitled to double the tax deduction of 200%, while qualifying expenses will be raised from 150% to 250%.
The launch of the Open Innovation Platform, a virtual-crowdsourcing platform, will connect businesses with info-communications and technology (ICT) firms and research institutes to co-create innovative business solutions.
Building deep capabilities
More targeted support will be rendered to larger companies to innovate and globalise with the Enterprise Development Grant (EDG), co-funding 70% of costs to develop a range of capabilities and offering companies to stay up-to-date in their industries.
An additional S$145 million will be set aside for the Tech Skills Accelerator (TeSA) to support firms to digitise as technologies continue to transform Singapore’s economy. Businesses and workers must be equipped with the necessary digital capabilities. The Ministry of Communications and Information will also be bearing the cost for TeSA expenses to equip businesses and workers digital capabilities from cyber-security, artificial intelligence, Internet of Things and analytics.