Businesses and self-employed people will be granted a three-month deferment on income tax payments to ease their immediate cash flow concerns after cash forecasting.
All companies with corporate income tax payments due in April, May and June will have them deferred automatically for three months. Payments will be collected from July.
This move is in addition to the 25 per cent tax rebate, capped at $15,000, for Year of Assessment 2020 that was announced last month in Budget 2020.
Self-employed people will also get a three-month deferral on personal income tax payments.
All freelancers, who have to file their personal income tax returns for Year of Assessment 2020 by April 18, will be given an automatic deferral of payments due between May and July.
These income tax deferments, announced as part of the more than $48 billion supplementary budget, will help to ease cash flow and are on top of wage support schemes announced last month, said Deputy Prime Minister Heng Swee Keat in Parliament yesterday.
He noted that cash flow is a key challenge faced by business owners amid the Covid-19 outbreak.
“For businesses, ‘cash is king’, and many have called for more timely assistance,” he said. “We are doing our best to flow the payouts under the wage support schemes quickly.”
By end-May, $5.6 billion will be given to employers under the Jobs Support Scheme and Wage Credit Scheme.
The Jobs Support Scheme was enhanced yesterday. It will now offset between 25 per cent and 75 per cent of the wages of every employee who is a Singaporean or permanent resident for nine months, up to a monthly cap of $4,600.
The Wage Credit Scheme, enhanced in last month’s Budget, co-funds wage increases for Singaporean employees earning a gross monthly wage of up to $5,000 – an increase from the previous ceiling of $4,000.
The Government is funding 20 per cent and 15 per cent for 2019 and 2020 qualifying wage increases, respectively.
This means businesses will receive about $16.2 billion through these two schemes by October this year, Mr Heng said.
Choo Yun Ting