COVID-19 Solidarity Budget in The Isolation Economy: Further Measures & Support for Businesses to overcome the Global Pandemic - SGTech
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COVID-19 Solidarity Budget in The Isolation Economy: Further Measures & Support for Businesses to overcome the Global Pandemic LIVE WEBINAR by IVAN CHANG 7 APRIL 2020 | TUESDAY | 12.30PM - 1.30PM
Safe Harbour Statements
• The information provided in this webinar is meant only for the intention of education and
learning. You should seek independent legal and accounting advice before conducting any
business or investment decision.
• All efforts have been taken to ensure the information provided in this webinar is accurate as of
publication date.
• The author(s) reserve all rights in the material provided.
https://isolation.sg/ 2
Ivan Chang
Co-Opted Councilor
SGTech
E: ivan@isolation.sg
S: @ivanchangwl
3
SGTech is a premier trade association for the tech
industry in Singapore. Within a rapidly evolving
technology landscape, SGTech strives to create an
ecosystem that anticipates trends and develops
sustainable initiatives to strengthen the
community and help the industry grow.
SGTech’s over 900 members range from
innovative start-ups, vibrant small and medium-
sized enterprises to top multinational corporations
that leverage technology as a core driver of their
business.
https://isolation.sg/ 4
A SGTech Community Effort to Support
SMEs & Startups in Singapore
Articles Webinar Courses
https://isolation.sg/
https://isolation.sg/ 5
8 April (Wed): Working from Home 14 April (Tue): COVID-19 Contractual Obligation https://isolation.sg/ https://isolation.sg/ 6
SME Courses with SkillsFuture: - Financial Survival - Work from Home Adoption - Adaption for The Isolation Economy - Transform Business Model - Sector Specific https://isolation.sg/ https://isolation.sg/ 7
Post Webinar Industry Survey
• Please help us help the technology industry by filling up
the post webinar industry survey
• Results will be shared with the relevant Government
agencies and for future policies suggestion
• We are stronger together
• Post Webinar Industry Survey will automatically be open
once you end the webinar
https://isolation.sg/ 8
Webinar Recording, Slides and Q&A
Slides Recording Q&A
Webinar slides will be A recording of this webinar Live Q&A will be conducted
available for download and will be available 2 hours via Zoom’s Q&A
circulation on https:// after the live session for functionality
isolation.sg/ playback and viewing
Kindly add your questions
Link will be emailed out to Link will be emailed out to and a selection will be
all participants all participants answered
https://isolation.sg/ 9
STAY HOME SAVE LIVES https://isolation.sg/ 10
Agenda for Webinar
1 COVID-19: Understanding the reason for the impact on our economy
2 Overview of the Singapore Government’s Solidarity Budget
3 For Companies: Measures to tide through the Crisis
4 For Companies: Support Announced in Budget 2020 (Unity & Resilience)
https://isolation.sg/ 111
COVID-19:
Understanding the reason for the impact on our economy
https://isolation.sg/ 12We are headed for a Major Global Recession
• Majority of Europeans and US economists
expect a major recession in the next 12 months
• Uncertain conclusion for emerging markets
Source: https://voxeu.org/article/economic-impact-pandemic-igm-forum-survey (12th March)
https://isolation.sg/ 13Singapore GDP Forecast
2020 Q1: -2.2% YoY 2020 Est: -1% to -4%
• We are expecting our economy to shrink for the
year 2020
• Q1 contraction is the worst drop since the 2008
Global Financial Crisis
• 2020 will likely be the worst contraction since
independence
• Last recession: 2001
Source: MTI, Straits Times
https://isolation.sg/ 14Stock Markets Declines in 2020
• Major indexes are all down
Source: LSE, Yahoo Finance
https://isolation.sg/ 15The Economics Expectation of COVID-19
Source: LSE
https://isolation.sg/ 16The Economics Expectation of COVID-19
• This is different from a Supply Side Shock
e.g. Global Financial Crisis of 2008 is a supply
side shock to the financial sector
• Initial stages of COVID-19: disruption in supplies
and labour, therefore decrease total supply
Source: LSE
https://isolation.sg/ 17The Economics Expectation of COVID-19
• This time: Massive Uncertainty in Households
and Businesses
• Creates a pressure to decrease spending and
increase savings (Demand Side Shock)
• Continuous downward cycle of Supply to
Demand to Supply to Demand again
• This is an attack of the “frictionless of the
market”
• Not an economic fundamentals attack (bubbles)
Source: LSE
https://isolation.sg/ 18The is Different from SARS
1 Global Pandemic
2 Importance of China today vis a vis 2003
https://isolation.sg/ 19Different from SARS: 1. Global Pandemic
Source: Economist
https://isolation.sg/ 20Different from SARS: 2. Importance of China today vis a vis 2003
Source: IATA
https://isolation.sg/ 21Different from SARS: 2. Importance of China today vis a vis 2003
Source: CBRE Research
https://isolation.sg/ 22The Isolation Economy
• Globally, 1 in 10 are confined to their homes
• High Skilled Workers more likely to have options
to work from home
• High Earners more likely to have options to work
from home
- 0-25th percentile: 9.2%
- 25-50th percentile: 20.1%
- 50-75th percentile: 37.3%
- 75-100th percentile: 61.5%
• Polarising World due to Economic Status
Source: USA Bureau of Labor Statistics
https://isolation.sg/ 23The Economy Will Rebound
• Demand side drivers leading to Supply side
growth
• Trillion dollar question: when?
Source: Economist
https://isolation.sg/ 24Opportunities and Threat in the Isolation Economy
Ivan’s Isolation Economy Framework
Take Advantage
Survive OR Resume
Adapt
What do you need to Choose the growth Post Crisis: Business
do now for your path in crisis: lay low as usual
business to survive or find opportunities
the next 6-18 months
https://isolation.sg/ 252
Overview of the Singapore Government’s Solidarity Budget
https://isolation.sg/ 26Current Term of Government
Singapore Government net income (in S$bn)
12.00
10.86
9.00
6.12 Estimated Size of Surplus Left
6.00 from this term of Government
3.45
3.00 2.2
1.91
0.00
-0.6
-3.00
-1.7
S$7-11bn
-3.5
-6.00
-9.00
-10.9
2016 2017 2018 2019 2020
Estimate Actual
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 27Using our reserves
We did not dip into the reserve during the 2003 SARS crisis
2008 (Oct) Bank Gurantee Backed all bank deposit in Singapore
2009 (Jan) S$4.9bn Global Financial Crisis
2011 (Feb) -S$4.0bn Returned to the reserve
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 28What is the measures for COVID-19
Unity Budget Resilience Budget Solidarity Budget
February 2020 March 2020 April 2020
$5.6bn $48bn $5.1bn
$4bn for Businesses $28bn for Businesses/Household $4.2bn for Businesses
$1.6bn for Household $20bn loan backing $0.9bn Household
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 29Using our reserves
2008 (Oct) Bank Gurantee Backed all bank deposit in Singapore
2009 (Jan) S$4.9bn Global Financial Crisis
2011 (Feb) -S$4.0bn Returned to the reserve
2020 (Mar) S$17bn COVID-19
2020 (Apr) S$4bn COVID-19
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 30Using our reserves
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 313
For Companies: Measures to tide through the Crisis
https://isolation.sg/ 32(A) Job Support Scheme (JSS)
• Helps enterprises retain their local employees
25% cash grant on gross monthly wages of each local employee (Singapore Citizens / PRs)
- Wage cap of $4,600.00 (i.e. $1,150.00 per employee per month)
- Based on 3 qualifying period (T1 Oct-Dec 2019 / T2 Feb-Apr 2020 / T3 May-Jul 2020)
- i.e. maximum payout per employee is $10,350.00
• Solidarity Budget
75% cash grant on gross monthly wages of each local employee (Singapore Citizens / PRs)
- Wage cap of $4,600.00 (i.e. $3,450.00 per employee for April 2020)
- i.e. maximum payout per employee is $12,650.00
https://isolation.sg/ 33(A) Job Support Scheme (JSS)
• How to qualify?
Administer by IRAS
- No need to apply
- Auto calculation based on CPF records
• Payout Date
Trench 1: May to now April 2020
Trench 2: July 2020
Trench 3: Oct 2020
https://isolation.sg/ 34(A) Job Support Scheme (JSS)
• For 8 Months:
• Food Service Sector: 50%
• Aviation Sector: 75%
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 35(A) Job Support Scheme (JSS)
• Who DO NOT qualify for JSS
Business Owners as defined by:
> Sole proprietor
> Partners of a partnership
> Employees who are BOTH shareholder and director of a company
> Self Employed for certain sectors (e.g. Taxi Drivers, Property Agents)
https://isolation.sg/ 36(B) Wage Credit Scheme
• Helping co-pay for Wage Increase
Co-fund wage increase up to $5,000
- FY2019: 15% to 20%
- FY2020: 15%
• How to qualify?
Administer by IRAS
- No need to apply
- Auto calculation based on CPF records
• Other Criteria
- Does not apply to the business owner of the company
- On payroll for at least 3 months in the qualifying year and preceding year
> 3 months employment need not be continuous
https://isolation.sg/ 37(B) Wage Credit Scheme
https://isolation.sg/ 38(B) Wage Credit Scheme
• Payout Date
Initial 15% for FY2019: 31 March 2020 (for FY2019) [PAID]
Additional 5% for FY2019: 30 June 2020 (for FY2020) [Brought Forward]
• Giro / Cheque from IRAS
*PayNow for FY2020
https://isolation.sg/ 39(C) Providing Lines of Liquidity: SME Working Capital Loan
• Local Banks Working Capital Loan
Increased quantum from $300,000 to $600,000 to $1,000,000
Government co-share risk from 50% to 80% to 90%
Interest remain the same
• Apply with the local bank
> If you already are on working capital loan: additional credit line
> If you are not: assessment for loan (~2 weeks to 1 month)
• Action
> Call your bankers after this to ask for reassessment
https://isolation.sg/ 40(C) Providing Lines of Liquidity: Temporary Bridging Loan
• Applies to ALL SECTORS now
• Special Bridging Loan Programme
$1m credit line access to now $5m
5% interest rate fixed
80% to 90% co-risk share by Singapore Government
• How to apply?
Local Banks
• Action
> Take this before the Working Capital Loan where possible due to likely lower interest rate
https://isolation.sg/ 41(C) Providing Lines of Liquidity: Other Loans
• Enterprise Trade Loan
For larger enterprises
Finance your trade and overseas working capital
Loan quantum increase from $5m to $10m
80% to 90% co-risk share by Singapore Government
• Loan Insurance Scheme
For larger enterprises
Subsidy for loan insurance premium now at 80%
https://isolation.sg/ 42(C) Providing Lines of Liquidity: Qualification
• Working Capital Loan
First line of loan qualification
Estimated: Firm with revenue up to $5m
• Temporary Bridging Loan Programme
Second line of loan qualification
Estimated: Firm with revenue above $5m
• Enterprise Trade Loan
Large enterprises
https://isolation.sg/ 43(D) Corporate Income Tax
• Reduce payments to the Singapore Government
25% rebate of tax payable
- Capped at $15,000 per company
- For YA2020 (i.e. FY2019)
• How to qualify?
Administer by IRAS
- No need to apply
- Auto calculation based on Income Tax Return
https://isolation.sg/ 44(D) Corporate Income Tax
• Automatic Deferment of Income Tax Payment for
3 months
This is for FY2018 (YA2019)
Payment due from April to June will be collected
only between July to September
• How to qualify?
Administer by IRAS
- No need to apply
- Auto calculation based on Income Tax Return
https://isolation.sg/ 45(E) Rental Waivers on Government Properties
• Rental on Government Properties
For Food Services
Hawker (NEA/NEA Operators): 1 month waiver to 3 months
• Others
HDB and Applicable Agencies: 1/2 month waiver to 2 months
Other Agencies: 0.5 months
https://isolation.sg/ 46(F) Property Tax Rebate for 2020
• Qualifying Commercial Properties
Hotels, Tourist Attractions, Shops and Restaurants
15% to now 100% Property Tax Rebate
• Other Non Residential Properties
Offices and Commercial Sites
0% to now 30% Property Tax Rebate
• Actions
> Call your landlord and ask for a rental discount
https://isolation.sg/ 47(G) Government Fees and Charges
• Freeze in Increase Government Fees and Charges
1 year from 1 April 2020 to 31 March 2021
• How to Qualify
> No application
> You still pay Government Fees and Charges
https://isolation.sg/ 48(H) Productivity Grants: Productivity Solutions Grants
• Increase Grant Reimbursement Amount
70% to 80% for existing PSG vendors already on the list
For the period of 1 April 2020 to 31 December 2020
• Increase Scope
Online Collaboration Tools
Temperature Screening Solutions
Queue Management Solutions
Virtual Meeting Solutions
https://isolation.sg/ 49(H) Productivity Grants: Productivity Solutions Grants
• Actions
> ICT Vendors in the 4 new scope areas to email ESG and
IMDA NOW
> Users of PSG to apply on 1 April 2020
https://isolation.sg/ 50(I) Productivity Grants: Enterprise Development Grant
• Increase Grant Reimbursement Amount
70% to 80%
For the period of 1 April 2020 to 31 December 2020
Up to 90% on a CASE by CASE basis for firms most impacted by COVID-19
• Actions
> If you are thinking of a EDG Project, call ESG now
https://isolation.sg/ 51(J) Foreign Worker Levy
• 1. Waiver of Foreign Worker Levy
For April 2020
> No action needed
• 2. Rebate
$750 cash back for each Work Permit or S Pass holder
> Payout in April 2020
https://isolation.sg/ 524
For Companies: Support Announced in Budget 2020 (Unity & Resilience)
https://isolation.sg/ 53Transform and Grow
• Medium and Long Term are still the emphasis
$8.3bn committed (over 3 years)
• 3 Focus Areas
1. Enhance Leadership
2. Ready for Growth
3. People & Skills
https://isolation.sg/ 54(A) Double Tax Deduction for Internationalisation
• Double Tax Deduction for Internationalisation
An extra tax coverage to reduce Chargeable Income (CI)
No application required for expenses up to S$150,000
• Essential
For every S$1 spent on qualified internationalisation effort, IRAS will give you $2 in qualified expenses
• Eligible Activities without needed approval
> Overseas business development trips and mission
> Overseas investment study trip and mission
> Overseas trade fairs
• No double dipping on other grants with DTDi
- You should only claim nett amount for DTDi less grants support
- E.g. You receive a MRA Grant of $10,000 for activities costing $14,000; DTDi is $4,000 * 2 = $8,000
https://isolation.sg/ 55(A) Double Tax Deduction for Internationalisation
• Enhanced DTDi
Extended to 31 December 2025
Expanded scope:
> Consultancy service to help setup
> Consultancy service to help hire talent
> Speaking slots at trade shows
> Transportation of materials for samples
• Effectively 1 April 2020
https://isolation.sg/ 56(B) Accelerated Write Off
• Assets acquired in YA2021
FY2020
- Elect accelerated write off
- 2 years
- Year 1: 75%, Year 2: 25%
• Above S19 and S19A
https://isolation.sg/ 57(C) Market Readiness Access (MRA) Grant
• Unless otherwise stated, the following conditions are applicable to those seeking support from
the Singapore Government (regardless of agencies)
• (1) Singapore Incorporated Business Entity
Does not have to be a Company (Pte. Ltd.) but advisable
• (2) 30% Local Shareholding
Beneficial owner should be naturalised human or Singapore entity
• (3) Annual Turnover not exceeding SGD $100million
• (4) Group Employment not exceeding 200 employees
https://isolation.sg/ 58(C) Market Readiness Access (MRA) Grant
• Overview
MRA is the first step grant to internationalise
Focus on Overseas Market Setup, Identification of Potential Overseas Partners and Overseas Market
Promotion
• Support
- Up to 70% of eligible cost
- Enhanced to $100,000 per company per new market over 3 years
- Extended to 31 March 2023
https://isolation.sg/ 59(C) Market Readiness Access (MRA) Grant
• Eligible Activities:
• 1. Market Entry
- Covers expense to setup a firm in the overseas market
- Covers both Representative Office setup or Proper Firm
• 2. Business Matching
- Hire in market consultant to find potential partners
- Most applicable for firms interested in franchising and distribution
• 3. Overseas Market Promotion
- Marketing and PR Cost for launch (e.g. Social media promotion)
- Participation in Trade Fairs not under iMAP programme
- Additional consultancy work
https://isolation.sg/ 60(D) Enterprise Leadership for Transformation Programme (ELT)
• Enterprise Leadership for Transformation Programme
Executive Training + Coaching + Support Network
9 months programmes by IHLs
- 900 companies in 3 years
https://isolation.sg/ 61(E) SkillsFuture Enterprise Credit (SFEC)
• Overview
One off $10,000 credit for 90% out of pocket cost
To be disbursed in October 2020
• Double Support
Eligible programme gets initial funding support followed by an additional 90% using the SFEC
https://isolation.sg/ 62(E) SkillsFuture Enterprise Credit (SFEC)
Source: SkillsFuture Singapore
https://isolation.sg/ 63(E) SkillsFuture Enterprise Credit (SFEC)
• Worked Example
MRA Project valued at $100,000.00
> Initial MRA Subsidy: -$70,000.00 (70% of MRA Project Value)
> SFEC Subsidy: -$7,000.00 (capped for segment)
Final cost to companies: $23,000.00
https://isolation.sg/ 64(F) Professional Conversion Programme (PCP)
https://isolation.sg/ 65(F) Professional Conversion Programme (PCP) by SGTech
https://isolation.sg/ 66(F) Professional Conversion Programme (PCP) by SGTech
https://isolation.sg/ 67(F) Professional Conversion Programme (PCP) by SGTech
• PCP in Digital Sales
Next Intake: April 2020
• Actions
> We will circulate the PCP Digital Sales after the webinar. Contact us if keen.
https://isolation.sg/ 68(G) SGTech and IMDA ICT Community Help
• Overview
SGTech and IMDA have asked our members to
support the other sectors in this challenging time
Collection of solutions (free and subsidised)
• Coverage
Visitor Management
Remote Working
Sell Online
Bill and Pay Online
Productivity Improvement
• Action
> Call relevant ICT vendors now
https://isolation.sg/ 69(G) SGTech and IMDA ICT Community Help
https://isolation.sg/ 70Ivan Chang
Co-Opted Councilor
SGTech
E: ivan@isolation.sg
S: @ivanchangwl
71SGTech is a premier trade association for the tech
industry in Singapore. Within a rapidly evolving
technology landscape, SGTech strives to create an
ecosystem that anticipates trends and develops
sustainable initiatives to strengthen the
community and help the industry grow.
SGTech’s over 900 members range from
innovative start-ups, vibrant small and medium-
sized enterprises to top multinational corporations
that leverage technology as a core driver of their
business.
https://isolation.sg/ 72A SGTech Community Effort to Support
SMEs & Startups in Singapore
Articles Webinar Courses
https://isolation.sg/
https://isolation.sg/ 73Post Webinar Industry Survey
• Please help us help the technology industry by filling up
the post webinar industry survey
• Results will be shared with the relevant Government
agencies and for future policies suggestion
• We are stronger together
• Post Webinar Industry Survey will automatically be open
once you end the webinar
https://isolation.sg/ 74Solidarity Budget in The Isolation Economy: Further Measures & Support for Businesses to overcome the Global Pandemic LIVE WEBINAR by IVAN CHANG 7 APRIL 2020 | TUESDAY | 12.30PM - 1.30PM
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