ECONOMY | Staff Reporter, Singapore

Proposed GST hikes do not worry SMEs: survey

SMEs think it will only have 'moderate' to 'no impact' on their business.

Three in four small and medium enterprises (SMEs) in Singapore are unfazed of proposed GST hikes saying it would only have 'moderate' to 'no impact' on their business, a DBS survey revealed.

SMEs think the new grants such as the Productivity Solutions Grant (PSG) and Enterprise Development Grant (EDG) would be able to provide some relief to help them weather the impending GST hikes.

The PSG combines grant schemes that support off-the-shelf productivity solutions. It aims to make it easier for businesses to adopt technologies and productivity solutions by shouldering up to 70% of qualifying costs.

The EDG, on the other hand, combines SPRING Singapore’s (SPRING) Capability Development Grant (CDG) and IE Singapore’s (IE) Global Company Partnership (GCP) grants. It aims to help businesses scale up and expand abroad by providing funding support for up to 70% of qualifying costs from FY 2018 to FY 2019.

At the 2018 budget announcement in February, Finance Minister Heng Swee Keat said they will set aside $800m over the next three years to fund PSG and EDG, together with the Partnerships for Capability Transformation (PACT)

Moreover, 82% of SMEs are in favour of extending the wage credit scheme especially since 6 in 10 said labour costs are plaguing their business.

“SMEs are resilient, and many are known to weather storms and the ups and downs of every economic cycle. The early proposal of the GST hike means that SME owners have enough lead time to plan ahead and ensure that they have the necessary provisions when the tax is implemented,” said Joyce Tee, group head of SME Banking at DBS Bank, in a press release.

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