Budget 2021 To Future-proof Singapore

The Budget 2021 statement was delivered by Deputy Prime Minster Heng Swee Kiat on 16 February 2021. 

Last year, 5 budgets were rolled out with nearly S$100 bn to help Singaporeans and businesses cope with the Covid-19 pandemic, ending the financial year with a record Budget deficit of S$64.9 bn.

Dampened by the pandemic, Singapore saw its Gross Domestic Product (GDP) contracted by 5.4%. Budget 2021, also dubbed the Emerging Stronger Together Budget is set to help Singapore get on the path of recovery. 

The Emerging Stronger Together Budget will see $11 bn set aside for Covid-19 resilience package. The package will focus on reopening Singapore safely and sustaining the momentum of its recovery through continuing to support workers and businesses, safeguarding public health and providing targeted help to sectors that are still under pressure. This includes the Jobs Support Scheme (JSS), which will be extended for sectors which continue to be hard-hit by the Covid-19 pandemic. 

Firms in Tier 1 sectors – aviation, aerospace and tourism – will get a six-month extension for the JSS. These firms will get 30 per cent support for wages paid from April to June this year, and 10 per cent support for wages paid from July to September. Firms in Tier 2 sectors – such as retail, food services, arts and culture, and marine and offshore – will get wage support of 10 per cent for three more months, covering wages paid up to June. Firms in Tier 3A sectors, which are generally recovering will get wage support of 10 per cent up to March.

There is also a S$24 billion plan to help its firms and workers adapt to a post-COVID-19 world, and it includes raising grants and extending training initiatives. Part of it will also go towards continuing job seeker-centric programmes such as the SGUnited Jobs and Skills Package and improving healthcare workers’ salaries.

Similarly, in the Built Environment sector that encompasses the construction, real estate and environment and facility services business will see a Growth and Transformation Scheme (GTS) that seeks to digitalise processes and upskill workers through the entire value chain.

On the tax front, there are ongoing discussions to revise international tax rules under the Base Erosion and Profit Shifting, or BEPS 2.0 project. These proposals will adversely impact Singapore’s corporate income tax revenues and the Government is actively involved in these talks. If and when these international tax rules are changed, the Government will consider if adjustments are required to Singapore’s corporate tax system accordingly.