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Budget 2016 Quick Takes: A heartening Budget for SMEs
Singapore's Finance Minister Heng Swee Keat announced in Parliament on Thursday a slew of relief measures targeted at the small-medium-enterprises (SMEs).
Amongst these are a total of S$1.9 billion given to firms for qualifying wage increases given under the Wage Credit Scheme as well as the hike in Corporate Income Tax Rebate to 50 per cent of tax payable, from 30 per cent, with a cap of S$20,000 rebate each year for YAs 2016 and 2017.
The finance minister also modified and extended the Special Employment Credit (SEC) for three years, to the end of 2019, to provide employers with a wage offset for workers aged 55 and above earning up to S$4,000 a month.
A SME Working Capital Loan scheme has been introduced, for loans of up to S$30,000 per SME. Mr Heng also announced a one year deferment of levy increases for Work Permit Holders in the marine and process sectors.
Here are some comments from KPMG in Singapore:
Chiu Wu Hong, Head of Enterprise:
"This year's Budget focuses on 2 broad groups - the small-medium enterprises (SMEs) and the people. It highlights the importance of a concerted partnership between enterprises, trade associations and chambers (TACs), government agencies, and unions. This provides continuous support for our people to manage a weaker and challenging economy."
"This is a Budget for the small-medium enterprises (SMEs). It addresses their short term measures and helps them to continue structuring and growing domestically and also compete internationally. SMEs need to transform themselves in the way they operate, automate and collaborate with an industry centric approach.''
"It is heartening to see that the Budget adopts a more sector focused approach with calibrated measures to help the different needs and challenges faced by small-medium enterprises (SMEs).''
Harvey Koenig, Tax Partner:
"This Budget is friendly to the small-medium enterprise (SMEs), providing access to funding and support for automation and internationalisation, and improving access to government grants. However, there could have been more support for innovation and value creation; hopefully this will be addressed in the recommendations by the Committee on the Future Economy.''
"The enhancement of the M&A incentive, extension of double tax deduction incentives and exemption of capital gains for share disposals are welcome measures and will provide strong support for Singapore businesses looking to internationalise. This timely enhancement will help SMEs take advantage of the ASEAN Economic Community.''