SG Budget 2024: S$1.3B package to eases companies’ higher cost struggles

SINGAPORE: Deputy Prime Minister and Finance Minister Lawrence Wong on Friday (16 February) announced a Government package of S$1.3 billion to assist companies in coping with the increasing cost of doing business.

During the announcement of Singapore’s 2024 Budget in Parliament, DPM Wong highlighted the Enterprise Support Package (ESP) introduced in Budget 2024.

This package aims to provide immediate relief to businesses facing challenges such as higher staff wages, and increased rental and utility bills.

DPM Wong emphasized that the ESP measures are oriented towards companies actively restructuring and transforming amidst elevated costs.

“I encourage all firms to make full use of these schemes, so that they can thrive and succeed amidst a more challenging operating environment,” said DPM Wong.

He acknowledged the surge in the cost of doing business in Singapore followed a spike in inflation in 2022, reaching levels not witnessed in over a decade.

Although inflation has since eased, the costs of raw materials and other inputs remain high, prompting central banks worldwide to raise interest rates.

The ESP comprises three components: a corporate income tax rebate, an enhanced Enterprise Financing Scheme, and an extension to SkillsFuture Enterprise Credit.

In the year of assessment 2024, companies will receive a 50 per cent corporate income tax rebate, capped at S$40,000.

To address concerns of companies not making a profit every year, the Government has decided to provide a minimum cash payout of S$2,000 to companies employing at least one local employee in 2023.

To assist businesses facing higher funding costs, the enhanced Enterprise Finance Scheme (EFS-TL) allows companies to access a higher maximum working capital loan quantum of S$500,000.

The extended maximum trade loan quantum will be applicable until 31 March 2025, as the previous extension in Budget 2023 is set to expire on 31 March this year.

The third component of the Enterprise Support Package involves extending the SkillsFuture Enterprise Credit (SPEC) until 30 June 2025.

SPEC aids businesses in enhancing productivity and transforming the workforce by providing a one-off S$10,000 credit covering up to 90 per cent of out-of-pocket expenses.

DPM Wong highlighted that the SPEC extension offers additional support for eligible employers undertaking workforce and business transformation, allowing them another year to claim any unused credit.

“With this extension, employers will have another year to claim any unused credit,” he said.

While acknowledging that the ESP measures offer near-term support, DPM Wong emphasized that they are not permanent solutions.

He stressed, “Over the longer term, the best way to deal with inflation is to ensure that our firms and workers are more productive, and that real income continues to rise sustainably.”