On 18 February 2020, Deputy Prime Minister and Minister of Finance Mr. Heng Swee Keat unveiled the Singapore Budget 2020 with various measures to stabilise Singapore’s economy and cushion the impact of the COVID-19 outbreak which badly hit business sectors such as retail, tourism, aviation and food services.
THE BUDGET IN SUMMARY
Measures unveiled in this year’s budget are:-
A. Virus outbreak support
- Stabilisation and support package for workers and enterprises such as 8% wage offsets, 25% CIT rebate, property tax rebates, rent waiver, etc;
- Care and support package with cash payouts for lower-income households to cope with their cost of living; and
- Funding for frontline health agencies in fighting for coronavirus.
B. Other measures
- Allow automatic extension of 2 more tax installment payments for YA 2020.
- Extension of Mergers & Acquisitions scheme.
- Enhancement of current year’s unabsorbed tax loss and wear and tear allowances carry back relief up to 3 immediate preceeding YAs.
- Defer the intended increase of GST rate of 9% to not later than year 2025.
- SkillsFuture credit top-ups for Singaporean to help retain and re-skill workers, deepening enterprise capabilities and developing Singaporean for future;
- Incentives to encourage re-employment of older workers, raise retirement age and funding of CPF contribution for employers employing senior workers.
- ARF rebate and reduction of road tax to reduce carbon emission by switching to electric cars.
Budget 2020 is expected to result in an overall deficit of S$10.9 billion, or 2.1 per cent of GDP, due to the current uncertain economy and the rapidly evolving coronavirus outbreak. The Minister has indicated that there are sufficient accumulated fiscal surplus to fund the overall deficit for FY 2020 and there is no need to draw on past reserves.