Every year, entrepreneurs anticipate how the budget announcements will directly impact their business. The budget announcements this year are especially important to startups, as many of them are still recovering from the financial instability caused by the pandemic. Below, we explore three ways that startups and small businesses can make better informed decisions based on Singapore Budget 2021.
#1: Extended Support For Hiring New Employees
The Job Support Scheme will reduce wage support for affected industries over the course of the next six months. For businesses operating in the areas of retail, arts and culture, food services, and environment, the Government will discontinue wage support after July 2021.
This Jobs Growth Incentive Scheme seeks to create more opportunities for long-term employment for Singapore Citizens and Permanent Residents. Business owners who hire new employees within the eligible period below will receive wage support for 12 - 18 months.
Business owners can also receive monetary benefits of up to 50% wage subsidy for the next 18 months. Also, consider applying for the Senior Worker Early Adopter Grant and Part-Time Re-employment Grant to expand the size (and productivity) of your team while also minimising hiring costs.
Depending on your business needs, the Jobs Growth Incentive Scheme makes it affordable to employ experienced professionals who are making a transition in their career or college graduates.
#2: More Loans & New Funds For Business Transformation
\Singapore Budget 2021 aims to equip businesses to ride the digital wave. With the slowdown in economic activity, traditional businesses in food and beverage, retail, and manufacturing can redesign existing jobs and build digital capabilities with the new initiatives in the Budget. Information technology startups can register as official vendors to offer their technology solutions, including prototyping and deployment. Businesses in the arts and sports sectors can enhance their digital and operational competencies with the S$45m Arts and Culture and Sports Resilience Package.
Singapore is increasing its commitment to sustainability efforts, which means that small businesses in the sustainable solutions sector will receive more assistance in the coming years. In addition, to improve Singapore’s food resilience, a S$60m Agri-Food Cluster Transformation Fund will be available to support technology adoption in the food production sector.
#3: Increase in Operating Expenses
From 2023 onwards, low-value imported goods will be subjected to GST and small businesses with vehicles can anticipate a GST hike up to 9%. One way to plan ahead would be to consider stocking up on necessary operating equipment before the implementation. There will also be a 10-15% increase in petrol prices, which means that businesses should account for this cost if they are in the delivery business or other business that relies heavily on transporting goods islandwide.
On a more positive note, all commercial vehicles are entitled to a 100% Road Tax Rebate for 1 year to cushion the increase in petrol duty. Businesses that acquire new machinery will be able to expense acquisition costs from taxable income for both YA 2021 & 2022.
While change is inevitable, there are several resources in Singapore including grants, loans, and other initiatives to assist businesses across sectors to transform and thrive in the coming year.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
Do you know more about this story? Contact us anonymously through this link.