On 16 February 2021, the Budget Statement was delivered in Parliament.

A key focus of the Budget was the theme of Emerging Stronger, Together.

The goal is to build new capabilities in people and businesses in this next phase of transformation

S$24 billion set aside to enable firms and workers to emerge stronger

Businesses in Singapore need to innovate and collaborate on a global scale to remain competitive. There were three main enhancements in the Budget:

  • Corporate Venture Launchpad: The initiative was launched this year, focusing on building new innovative ventures through pre-qualified venture studios. The main objective will be to encourage a startup mindset within organizations.
  • Open Innovation Platform (OIP): Matches the problems faced by companies and agencies to solution providers and co-funds prototyping the deployment of solutions.
  • Global Innovation Alliance (GIA): Taskforce focusing on accelerating the collaboration between Singapore and major hubs globally. The GIA is expected to extend to 25 cities globally over the span of the next five years. This will be in-line with the Co-innovation Programme which supports up to 70% of costs for partnership and cross innovation projects.
  • Certain sectors will also receive additional support as follows:
  • $870 million support and cost relief for the aviation sector.
  • $133 million dollars for the COVID-19 Driver Relief Fund, to aid taxi and private hire car drivers ($600/month per vehicle from January to March 2021, $450/month per vehicle from April to June 2021)
  • $45 million to enhance the Arts and Culture Resilience Package and Sports Resilience Package
  • For high growth enterprises including startups and mature enterprises, the Government will ensure access to financial capital through the enhancement of the Enterprise Financing Scheme venture debt programme. The support will come in the form of:
  • Raising the Venture Debt Programme cap from $5 million to $8 million dollars. The Government will co-fund the adoption of digital solutions and new technologies
  • The new Emerging Technology Programme will co-fund the cost of adopting frontier technologies
  • The CTO-as-a-Service will provide access to professional IT consultancies
  • Digital Leaders Programme will allow companies to hire a core digital team and develop a digital transformation roadmap

Enhancement to wages and job opportunities

  • Extension of Wage Credit Scheme (WCS): The WCS will be extended for a year, at a co-funding level of 15% to attract and retain locals.
  • Extension of Capability Transfer Programme (CTP): Program will be extended till end-September 2024.

View PDF here: 2021-Singapore-Budget-Highlights-Impact-on-Businesses

On 16 February 2021, the Budget Statement was delivered in Parliament.

A key focus of the Budget was the theme of Emerging Stronger, Together.

The goal is to build new capabilities in people and businesses in this next phase of transformation.

The below is a summary of tax considerations which may impact businesses in Singapore due to the Singapore Budget announced on 16 February 2021.

Extensions and Changes
  • Carry-back relief scheme extended to YA2021.
  • Extension of the option to accelerate the write-off of cost for acquiring plant and machinery.
  • Extension of the option to accelerate the deduction of expenses incurred on renovation and refurbishment.
  • Enhancement of the Double Tax Deduction for Internationalizations Scheme (DTDI).
  • Business and IPC Partnership Scheme extended till December 2023.
  • NPO tax incentive extended till 31 December 2027.
  • Investment Allowance (Energy Efficiency) (“IA-EE”) scheme renamed as Investment Allowance for Emissions Reduction” scheme. Projects involving the reduction of greenhouse gas emissions will now qualify.
  • Accelerated Depreciation Allowances for Highly Efficient Pollution Control Equipment (“ADA-PCE”) scheme withdrawn from 17 Feb 2021.
  • Tote Board’s Enhanced Fund-Raising Programme will also be extended by one year. Charities can apply to receive dollar-for-dollar matching on eligible donations, which are raised from projects in FY2021, up to a cap of S$250,000 per applicant.
  • ComChest’s SHARE as One scheme dollar-for-dollar matching extended to FY2023.
  • 250% tax deduction for donations extended to 31 December 2023.

Goods and Services Tax (GST)
  • GST will be imposed on low value goods imported via air or post.
  • GST will also be applicable for imported non-digital services such as live interaction with overseas providers of education, fitness training, counselling, and telemedicine. Such services have been subject to GST since 2020 at the business-to-business level and will be subject to GST at the business-to-consumer (B2C) level from 2023.
  • The changes will take effect from 1 January 2023 even though the plans were announced in Budget 2018.
  • Changes made for determining whether zero-rating applies to a supply of media sales. This will be based on the place where the customer and direct beneficiary of the service belong. This change will take effect from 1 January 2022.
      • Media sales will be zero-rated if the customer belongs outside of Singapore and the direct beneficiary belongs outside Singapore or is GST registered in Singapore.
      • Media sales will be standard-rated if the customer belongs in Singapore

View PDF here: 2021-Singapore-Budget-Highlights-Tax