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Singapore budget 2021

How to Position Your Company for Growth in View of Budget 2021

Each year when the budget is announced, the government of Singapore focuses on balancing the priorities through a combination of both long-term and short-term measures that can help support the economy. Singapore budget 2021 is no exception as the government is again responding to the immediate short-term needs of families, workers, businesses that have been hit hardest by the Covid-19 pandemic.

As much as Covid-19 has disrupted business models and global supply chains; it has also accelerated digitalization which to a great extent presents new areas of growth that Singaporean citizens can explore. Singapore has in the past year incurred a strange budget deficit and the government continues to offer economic support in the face of an extended downturn that has come up as a result of Covid-19 pandemic. The government has announced a sizeable budget stimulus which then makes this year a bit unusual as Singapore continues to draw from the past reserves for another consecutive year.

Singapore is expected to register a budget deficit of S$11 billion this year which is about 2.2% of the GDP and this should be in addition to S$64.9 billion which is the deficit for the 2020 fiscal year, the largest to be realized since Singapore’s independence. The budget 2021 has prioritized the need to set apart targeted support to the business sectors and the various segments of society that are hardly hit and continue to struggle due to the pandemic. The move is combined with the long-term goals such as a range of initiatives that are designed to encourage global partnerships, business innovation, and digital transformation for the local businesses.

In order to position your company for growth; ensure that you have in depth understanding of what the budget entails. Working with a reputable corporate service provider in Singapore can help break down some of the key highlights of the budget that can have an impact on your business. The Minister for Finance announced in the budget that there will be an S$11 billion Covid-19 Resilience Package. This amount is meant to specifically go towards safeguarding public health including the provision of vaccination and ensuring continued support for the workers and businesses that are hardest hit by the pandemic.

Such a move is quite different from the broad-based support that the government provided last year to the sectors that have been hardest hit by the pandemic. The government continues to provide support to workers and businesses through an extension of the Job Support Scheme which targets the provision of support to the hardest hit sectors such as aerospace, aviation, and tourism.

For families that are still coping with the uncertainties that came along as a result of covid-19; an amount of S$900 million Household Support Package which also include a one-off cash payments to the lower and middle income families receiving more. The Minister also talked of measures that are meant to help strengthen social safety nets in support of the vulnerable members of the society including the lower income families and low-wage workers.

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Why Outsource Nominee Director Services in Singapore

Majority of foreign investors are considering incorporation of company in Singapore and the move is mainly influenced by Singapore’s low corporate tax rates. However, it’s a statutory requirement according to Singapore’s Companies Act that a foreign-owned company should have a local director who is a resident of Singapore.  For a foreign company to be considered as fully compliant with Singapore’s Company Act, the company should consider engaging nominee director services in Singapore.

When you engage nominee director services from Onestop CA Singapore; you get access to a reputable local director that can serve your company. Onestop CA offers a wide range of services such as Auditing, Accounting, Tax Planning, Business Compliance Services, Company Secretary Services and local director services. The corporate service provider has a team of compliance experts that will definitely ensure that the important guidelines that pertain to operating an offshore company are adhered to accordingly.

Companies that fail to comply with the statutory requirements are likely to face severe penalties such as fines and may even lead to cessation of business operations. Having nominee director services in Singapore will help in ensuring that your business operations flows smoothly as they act as the contact person that represents your business interests within the country. The role of a nominee director in Singapore is to comply with the law and will be able to operate as per the duties delegated by the company director.

A company can have as many directors as possible but there should at least be one who is a local resident of Singapore. The nominee director is still considered as a director and should be able to act in the best interest of the company and in compliance with the law. When engaging a firm for nominee director services in Singapore, it’s vital that you take into account the credibility of the company. Here are some of the reasons for outsourcing nominee director services;

Credibility and Expertise

A nominee director services in Singapore holds such an important position and that calls for engagement of an individual that has demonstrated high level of credibility and expertise. If you’re operating an offshore company in Singapore then you may not be certain about the level of credibility and expertise of those who get to show interest in such a position. However, working with a reputable firm such as Onestop CA helps in ensuring that you get access to an individual who is not only credible but also well conversant of the tasks that they are to perform.

Reliability

Working with a reputable firm such as Onestop CA Singapore for delivery of nominee director services ensures reliability as the firm will always be there to address any issues that might arise with regard to delivery of such services. Onestop has a proven track record in delivering a range of corporate services to several clients. Apart from provision of local director services; Onestop CA Singapore is also the go-to place for other corporate services such as Auditing, Accounting, Tax Planning, Advisory services among others.

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Singapore Budget 2021

The Secret Ingredient of Singapore’s 2021 Budget Plan

Singapore budget is announced each year with the financial year starting from the 1st of April of every year to the 31st of March of the next calendar year. The budget normally includes revised government revenue and expenditure projections for the current year as well as a planned government revenue and expenditure for the coming financial year. Before announcing the budget; the minister of finance carries out consultation to help gather feedback for the next financial year’s budget.

The feedback process takes about two months and all the suggestions and views gathered gets submitted during the set period and are taken into consideration when designing the budget. Once the designing of the budget is done, it gets presented before the cabinet for approval. Just like the budget that people set aside for their own personal expenditures; Singapore budget is normally planned with the aim of enabling Singaporeans to spend wisely.

The measures that were announced in Singapore budget 2021 are meant to help the country press on with economic and workforce transformation while strengthening the social compact and building a future for all in a way that’s sustainable. While budget 2020 was tilted towards the delivery of emergency support in a broad-based way, budget 2021 focuses on accelerating structural adaptations. Last year, apart from the usual spending; the government also committed about S$100 billion through the five budgets to support Singaporeans and also help businesses to stay strong during the pandemic.

One of the secret ingredients of Singapore’s 2021 budget is the fact that it puts in place structural economic policies to help equip businesses and workers with deep and future-ready capabilities. In order to fund the budget, Singapore will draw from its past reserves for the second year in a row and the budget is expected to post a deficit of S$11 billion or an equivalent of 2.2 percent of gross domestic product (GDP). The budget is such a balanced one as it addresses the immediate needs by supporting some of the worst-hit sectors in a way that’s targeted.

The budget focuses on the environmental and fiscal perspective while still supporting the medium to long-term needs of digital transformation, sustainability and upskilling of workers. The key ingredient of Singapore budget 2021 is the push for transformation.

Transformation

The government outlined S$24 billion that’s to be spent over the next three years to help workers and companies emerge stronger in the push for transformation. The funds are designed to be used in building the ecosystem for innovation, digitalize businesses, create a vibrant business sector and strengthen the workforce. The new budget measures such as the emerging technology program and the digital leaders program further helps in strengthening the range of measures that companies can tap on for increased competitiveness and position for growth post Covid.

Large local enterprises

The government also set aside S$500 million to be in a local enterprises funding platform to be commercially managed. The platform is to invest in non-control equity and mezzanine debt of the selected LLEs which are committed to work with the fund manager in pursuit of the next phases of growth.

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Singapore budget 2021

Tax Changes Overview in Singapore Budget 2021

On February 19, 2021 the deputy prime minister and minister of finance, Mr. Heng Swee Keat unveiled Singapore budget 2021. Budget 2021 is quite broad based and structured in a way that helps embolden and restructure businesses as they seek new growth opportunities. In order to help businesses emerge stronger together; the government committed to building strong growth enablers that foster innovation spirit, and enterprise of the business communities with the aim of enhancing a range of capital to help transform and also scale businesses.

Some of the tax changes proposed in the budget are as below;

Extension of Budget 2020 Tax measures

Several tax measures and the non-tax ones were announced during budget 2020 to help mitigate the widespread financial impact of covid 19 on workers and businesses. Since there is still no visible end to the pandemic, specific sectors are still struggling from the effects of covid-19 and that has led to some of the relief measures being extended.

Enhanced carry-back relief scheme

Under the existing carry-back relief scheme, the unabsorbed capital allowances and trade losses for the current year could be carried back to the immediate year of assessment. In the budget for 2020, the carry-back relief scheme was expanded to create room for qualifying deductions for the year 2020 to be carried back up to the three immediate preceding years but it’s subject to conditions.

Option to accelerate tax write-off on plant and machinery acquiring costs

The option to accelerate write off of the plant and machinery acquiring costs will be extended to qualifying capital expenditure that’s incurred on the acquisition of plant and machinery in the financial period 2022. This move will help ease cash flow for businesses that have plans of purchasing new assets. Under the accelerated option, businesses are allowed to claim capital allowance of 75% of the cost incurred in the first year and 25% of qualifying cost in the second year. There is no deferment of capital allowance claim that’s allowed under these.

Option to accelerate the deduction for refurbishment and renovation expenses

The expenditure that’s incurred on refurbishment and renovation works that are related to business setting do not qualify for capital allowances. The taxpayers who incur renovation and refurbishment expenditure for the purpose of profession, business or trade should claim tax deduction on those costs for a period of three consecutive years. However, the claim is subject to an expenditure cap of S$300,000 for every relevant year. For the qualifying refurbishment and renovation costs that are incurred in the year 2021, taxpayers were given the option to claim the deduction within one year.

Goods and Services Tax

It was announced in the budget that the planned goods and services tax rate is to increase from 7% to 9% and this is to happen within the period 2022 – 2025. The timing for the increase of GST tax will be subject to the economic outlook. GST will be extended to the low-value goods which are imported either via post or air. And the non-digital imported B2C services.

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Singapore Budget 2021

Singapore Budget 2021 Commentary

Last year, Singapore’s economy got impacted by the worst recession on record, and in response; the minister for finance delivered an unprecedented 5 budgets of S$ 100 billion to help combat the Covid-19 pandemic. This year, the economy is forecast to grow at between 4% to 6% as much as the recovery is expected to be uneven as some of the sectors are likely to progress well with others still remaining under stress.

The measures taken with budget 2021 are designed to help keep Singaporean workers afloat and also enable them to think of new opportunities on how to thrive during these challenging times.

Here is a snapshot of the budget 2021 alongside a commentary of the changes;

Green Plan 2030

The minister for finance while announcing the budget touched on Singapore Green Plan 2030. This entails a plan to tackle climate crisis and the efforts to increase solar capacity while also engaging in research into other sources of renewable energy. The green infrastructure projects and the incentives are intended to help encourage wider adoption of low emission vehicles and all these are geared towards building a more sustainable future for the generations to come.

The title of the budget 2021 was Emerging Stronger Together and while budget 2021 provides an array of support that’s more targeted towards the hardest hit business sectors and workers as they continue with the struggle amid the pandemic. This focus is coupled with attention towards the future with regard to digital transformation and business innovation alongside strengthening efforts to tackle climate crisis and invest in the renewable energy sources.

Household Support Package

For the families that are still coping with uncertainties that came along as a result Covid-19; the minister of finance announced that S$900 million has been set aside for household support package. The amount also includes one-off cash payments for the lower to middle income earners. The minister also spoke of the measures that have been taken to help strengthen social safety.

The minister talked of the proposed GST rate that’s to be increased from 7% to 9% during the period 2022 – 2025 and this is likely to influence the economic outlook. The ministered confirmed that the S$6 billion assurance package that was announced last year would help many Singaporean households to be cushioned against the impact of GST increase when the time comes.

Covid Resilience Package

The minister of finance also announced an S$11 billion COVID-19 resilience package to help support the recovery process. This amount will primarily help with safeguarding public health, vaccinations, and continued support for the workers and the business sectors that are hardest hit. The temporary wage support is another key highlight of the budget as it helps many workers who are hardest hit to prevent bankruptcy which is likely to affect households deeply.

Keeping the current workers employed also has short-term and long-term benefits with the most immediate being prevention of further financial hardship as a result of the pandemic. A targeted measure such as the jobs support scheme that was announced through SGUnited Skills with an additional S$5.4 billion was allocated to help minimize the long-term effects for those who get displaced.

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How to Leverage Business Growth by Engaging Corporate Service Providers in Singapore

Corporate service providers are companies that provide a range of professional services such as Auditing, accounting, incorporation of Company Services, Business Advisory services and more. Such services are quite vital for the growth and efficiency of businesses. Engaging corporate service providers in Singapore can help business gain insight on how to improve their business processes and realize growth.

Work smarter and not harder has become a common phrase that’s meant to address the lack of time, finances and resources that many experience in businesses. However, it becomes a challenge when translating the words to actionable strategies. One of the ways of working smart is by engaging corporate service providers in Singapore to handle tasks that are repetitive and require a level of expertise. Working with service providers greatly helps in ensuring that complex tax that are time consuming are given to those with the relevant expertise to handle them effectively.

You can leverage on business growth and get more done when you focus on more critical tasks as you delegate, outsource and even automate some repetitive tasks. Outsourcing professional tasks to corporate service providers such as Onestop CA Singapore helps in ensuring that your professional tasks are executed with experts that understand the statutory requirements and has the skills needed to execute the tasks effectively.

From customer satisfaction to observing compliance, all are directly related to delivery of high quality service. Corporate service providers in Singapore can take on tasks that your company cannot handle effectively as you might be lacking on the required skills and experience. When you outsource such tasks to corporate service providers, you end up with sufficient time that can be concentrated on performing important tasks. Outsourcing auditing and accounting tasks will provide you with access to a team of experts that are well versed with the services and that eliminates chances of committing costly mistakes.

Outsourcing professional services provides the company with the opportunity to improve the skills of their staff. If in case you outsource internal audit tasks then the firm engaged will have to check on the systems and internal controls if they are effective. If not, they will get to make recommendations on what’s ideal for the company to adopt. Engaging a CA expert for some internal work will definitely lead to skills transfer and that in turn has a way of impacting on your business growth.

Engaging a corporate service provider in Singapore makes it possible for a company to access to a range of services at one place. It then becomes possible for a company to benefit from the expertise and experience that the service providers have on a range of services. Businesses can then be able to develop core competencies without having to invest further on hiring more qualified staff. They can also refine their services and streamline the processes so as to ensure efficient business processes. Outsourcing professional tasks provide a company with access to top quality personnel that can be of great help to their organization in general.  

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