Key Changes in 2022 vs 2021: Everything SMBs Should Know

In the budget speech, Finance Minister Mr Lawrence Wong outlined the need for the Government to extend support to Singaporean SMBs to help them recover following a difficult business period. Here is how this year’s schemes and proposals compare to those introduced in Budget 2021.

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Key Changes in 2022 vs 2021: Everything SMBs Should Know

Budget 2022: Key Changes in 2022 vs 2021: Everything SMBs Should Know

28 February 2022 | SMB, Digitalisation | 5 min read

Topic Budget 2022 Budget 2021
GST With effect from 1 January 2023, GST will rise from 7% to 8%. This will increase to 9% from 1 January 2024. With effect from 1 January 2023, imported low value goods will be subject to the same GST as local businesses.
Support for businesses ● The Small Business Recovery Grant will provide a one-off cash payout of $1,000 per local employee (up to a cap of $10,000 per firm) to businesses most affected by pandemic-related restrictions.

● The enhanced Temporary Bridging Loan Programme and the enhanced Trade Loan Scheme will be extended to 30 September 2022.

● Project Loans for the domestic construction sector will be extended to 31 March 2023.

● Foreign worker policies were also adjusted to reflect a new market reality and to reduce reliance on foreign labour. This includes increasing the minimum qualifying salaries for new EP and S Pass applicants and an adjustment to the Dependency Ratio Ceiling for construction and process businesses.

● Small and micro enterprises are granted a waiver of the Skills Development Levy for calendar year 2021. The credit can be claimed before 30 June 2024.
● The Jobs Support Scheme (JSS) extended partial wage support to the sectors affected the most by the pandemic.

● The Arts and Culture Resilience Package and Sports Resilience Package added similar support for SMBs and self-employed persons.

● The Temporary Bridging Loan Programme and the enhanced Enterprise Financing Scheme was extended for another year.

● Support for Scale-up SG programme, Productivity Solutions Grant, Market Readiness Assistance Grant, and Enterprise Development Grant was extended to March 2022.

● The Enterprise Financing Scheme - Venture Debt programme continued to provide funding assistance to high-growth enterprises. The loan quantum under this programme was increased to $8 million from the previous $5 million.
Support for workers ● The Jobs Growth Incentive will be extended to September 2022 inclusive.

● The SGUnited Mid-Career Pathways Programme will be converted to a permanent programme for mature mid-career workers.

● Such career transitions will also be supported by the newly introduced SkillsFuture Career Transition Programme, which will provide high quality training for local workers.
● The Jobs Growth Incentive provided wage support for businesses that hired and trained more local workers. Companies hiring eligible locals were provided 12 months of wage support while companies hiring mature workers, persons with disabilities, and ex-offenders were provided 18 months of wage support.

● The Wage Credit Scheme allowed businesses to continue providing wage increments under the condition of retaining and hiring local workers.

● The Capability Transfer Programme provided support for businesses to train local staff and reduce reliance on foreign labour.
Enabling digital transformation ● From 1 April 2022, the Grow Digital scheme will be expanded to include more digital platforms to help Singaporean businesses establish digital presence in international markets.

● The TechSkills Accelerator (TeSA) initiative provided by SkillsFuture will help SMBs hire mid-career workers with the appropriate training.

● The Advanced Digital Solutions (ADS) will provide up to 70% funding for the introduction of modern technology, which has been expanded to include artificial intelligence and cloud solutions.

● The Productivity Solutions Grant will provide support for 100,000 SMB projects to adopt digital productivity solutions over the next 4 years.
● Support was provided for businesses to lay the basis for the adoption of frontier technologies such as 5G and artificial intelligence.

● Trials for these technologies are supported by the Emerging Technology Programme.

● Hiring for core digital teams is supported by the Digital Leaders Programme.
Encouraging business innovation ● Businesses undertaking R&D activities in the agri-tech, construction, food manufacturing, precision engineering and retail sectors will receive more support over the next 5 years.

● In this period, businesses in the pilot industries can take up approximately 2,000 new innovation projects.
● In order to encourage businesses to innovate locally and collaborate internationally, support was provided through the following platforms; Corporate Venture Launchpad, Open Innovation Platform, Global Innovation Alliance, and Co-Innovation Programme.
Carbon tax ● Singapore’s carbon tax will increase to $25 per tonne of greenhouse gas emissions from 2024 to 2025. From 2026, this will increase to $45 per tonne. The minister indicated the Government’s intention to increase this tax to $80 per tonne by 2030.

● Businesses can use high-quality international carbon tax to offset up to 5% of their tax liability from 2024.
● Singapore’s carbon tax will remain at $5 per tonne of greenhouse gas emissions through 2023. Any increase was deferred to the following year.

● The Additional Registration Fee for electric vehicles was reduced to 0. Meanwhile, premium petrol duties was increased to 15 cents a litre and intermediate petrol duties was raised to 10 cents a litre.

For the full transcript of the Singapore Budget 2022 speech, please visit the Singapore Budget website. Read our rundown of Singapore Budget 2022 for SMBs.

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