Lower levies for offsite workers will apply to more pre-fab facilities

MORE operators of design for manufacturing and assembly (DfMA) facilities will soon be able to enjoy lower levies for their offsite workers. This is provided they adopt a higher level of automation in their processes, said Minister for National Development Desmond Lee on Wednesday (Sep 6).

“This will facilitate the shift towards off-site prefabrication wherever possible, and encourages our facilities to adopt new automation technologies,” added Lee, who was giving an opening address at the 2023 International Built Environment Week event.

On the same day, the Building and Construction Authority (BCA) said that other types of DfMA facilities will be assessed on a case-by-case basis, provided they commit to investing in higher levels of automation within the next three years.

Lee’s comments come as the Singapore government phases out the man-year entitlement (MYE) levy framework in favour of a more streamlined Off-site Levy Scheme, effective on Jan 1, 2024.

Currently, construction and process sector companies looking to hire workers from non-traditional sources must apply for MYE before applying for work permits. These non-traditional sources comprise India, Sri Lanka, Thailand, Bangladesh, Myanmar and the Philippines.

The new Off-site Levy Scheme differentiates levies between on-site and off-site workers, with lower levies for the latter. From next year, levies for offsite construction workers of all nationalities will drop to S$250 from S$300 for higher-skilled (R1) workers and to S$370 from S$700 for basic-skilled (R2) workers.

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The new levy rates will also help push firms to diversify their work permit holder workforce, as rates for onsite R1 workers from non-traditional sources will increase to S$500 from S$300 and to S$900 from S$700 for R2 workers.

Levy rates for workers from Malaysia, the People’s Republic of China and North Asian sources like Hong Kong, Macau, South Korea and Taiwan remain unchanged.

Operators of DfMA facilities can apply for the off-site levy scheme from Oct 1, 2023, BCA said.