The Budget 2024 theme, “Building Our Shared Future Together”, comes against the backdrop of 2023, which saw the ongoing war in Ukraine and a subdued global economy, in which Singapore narrowly avoided a recession.
According to Deputy Prime Minister Lawrence Wong, the outlook in 2024 is mixed – while global economic growth is expected to remain strong, wars and other geopolitical risks can escalate and lead to energy and supply chain disruptions, which may affect Singapore. Hence, Budget 2024 is aimed at helping households and businesses tackle immediate challenges and help upskill workers for the long run.
Here are 10 things that business owners need to take note of from Budget 2024.
#1 Corporate Income Tax Rebate
Companies will receive a 50% Corporate Income Tax Rebate, capped at $40,000 in YA2024. A minimum benefit of $2,000 in cash payouts will also be provided for companies that employed at least one local employee in 2023.
#2 CPF Transition Offset For Employers Extended For 1 Additional Year
CPF Contribution rates for those aged 55 to 65 will be increased by 1.5% in 2025 as originally planned. This is to help support the retirement needs of people who are nearing the age of retirement. To help cushion the impact on business costs, the CPF Transition Offset will be extended for another year to cover half the increase in employer contributions for 2025.
Read Also: Senior Worker CPF Contribution Rates And CPF Transition Offset Scheme: What Businesses Need To Know
#3 Local Qualifying Salary Increased
Local companies that employ foreign workers must ensure that their local employees must be paid the Local Qualifying Salary, which has now increased to $1,600 (up from $1,400). The minimum hourly rate is also increased to $10.50 per hour (up from $9). This is to ensure that Singaporeans keep pace with wage growth.
Read Also: Local Qualifying Salary: 5 Things You Need To Know About LQS
#4 Progressive Wage Credit Scheme To Be Enhanced
Budget 2024 provides three enhancements to the Progressive Wage Credit Scheme:
- Government co-funding levels are increased from 30% to 50% for the first tier, and 15% to 30% for the second tier. This will apply to wage increases given in the qualifying year 2023 and sustained in 2024.
- PWCS wage ceiling was raised from $2,500 to $3,000 in qualifying years 2025 and 2026.
- Wage cut-off at $4,000 from 2024 onwards for employees whose average monthly wage exceeds $4,000 post-wage increase, so that PWCS is targeted at supporting wage growth of lower-wage employees.
Read Also: Progressive Wage Credit Scheme (PWCS): What Businesses Need To Know
#5 SkillsFuture Enterprise Credit To Be Extended
SkillsFuture Enterprise Credit is extended by 1 year to 30 Jun 2025, which will allow employers another year to claim unused credit. This is to support eligible employers in embarking on workforce and business transformation.
#6 SkillsFuture Level Up Programme For Those Aged 40 And Above
Those aged 40 and above will receive a top-up of $4,000 SkillsFuture credits in May 2024. These credits are mainly aimed at boosting mid-career workers’ future employability, so they can only be used in selected diploma, post-diploma and undergrad programs, as well as courses for Progressive Wage Model sectors.
Those above 40 years old can also receive subsidies for full-time diplomas (Polytechnics, ITE and Arts Institutions) from AY 2025 onwards. In addition to this, they can get a monthly training allowance of up to 50% of previous pay, capped at $3,000/month if they are enrolled in selected full-time courses. Each individual can receive a maximum of 24 months of training allowance throughout their lifetime.
Younger Singaporeans will also get these benefits when they turn 40.
#7 PACT Scheme To Be Enhanced
The PACT Scheme will be enhanced to support partnerships in more areas: capability training, internationalisation and corporate venturing, and this is aimed at helping more Singaporean firms plug into global supply chains and compete in overseas markets.
Read Also: PACT Programme: How SMEs Can Build Capabilities By Working With Other Companies
#8 Enterprise Financing Scheme To Be Enhanced
The SME Working Capital Loan will be increased from $300,000 to $500,000 permanently. Also, the maximum trade loan quantum and the government’s risk sharing of project loans to support domestic construction projects is extended until Mar 31, 2025. Finally, enhanced support for green loans will also be extended, and its scope expanded, to help SMEs adopt green solutions.
Read Also: How The Enterprise Financing Scheme (EFS) Can Help SMEs
#9 Energy Efficiency Grant To Be Enhanced
The Energy Efficiency Grant was first introduced in 2022 for companies in Food Services, Food Manufacturing and Retail sectors, and it will be extended to more sectors including Manufacturing, Construction, Maritime and Data Centres and their users. Beyond pre-approved energy-efficient solutions supported under the grant, additional support is available for companies with more ambitious plans to reduce their emissions.
Read Also: How Businesses Can Tap On NEA’s Energy Efficiency Fund (E2F) To Reduce Their Electricity Usage
#10 Refundable Investment Credit To Be Awarded To Companies By EDB and ESG
Refundable Investment Credit will be awarded to support high-value and substantive economic activities such as:
- Setting up/expansion of manufacturing facilities
- New Innovation/R&D
- Research & Development
- Green Transition
The Economic Development Board(EDB) and Enterprise Singapore (ESG) will award the Refundable Investment Credits, which will be used to offset corporate income tax. Unutilised credit will be refunded to the company in cash within 4 years.
Building a Sustainable Future
Be part of the Singapore Green Plan 2030 and achieve your business’ sustainability goals. Fund your green initiatives today with the OCBC SME Sustainable Financing Framework.
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