With the pandemic still affecting many SMBs in 2021, the Singapore government continued to support them in sustaining business growth. 

The focus of Singapore’s Budget 2021 was ‘Emerging Stronger Together’, with three key enablers outlined to create innovative businesses and meaningful jobs and opportunities. These include the spirit of innovation and enterprise, financial capital and human capital.

We outline the support measures announced in Budget 2021, along with what SMBs can expect for the new year.

COVID-19 relief measures

The Enterprise Financing Scheme – Project Loan (EFS-PL) was enhanced from 1 January 2021 to 31 March 2022, to support project loans for domestic construction projects.

Introduced in Budget 2020 to provide additional working capital support for enterprises, the Temporary Bridging Loan Programme (TBLP)  was extended for another six months to 30 September 2021.

Also introduced in Budget 2020, the Jobs Support Scheme (JSS) provides wage support for employers to retain their local employees. This was extended for firms in Tier 1 and 2 sectors by up to six months, covering wages paid up to September 2021.

Support measures to promote business development and leadership

Businesses can tap on the enhanced Enterprise Development Grant (EDG) for projects in three key areas: core capabilities, innovation and productivity and internationalisation. Support covering up to 80% of qualifying costs has been extended until 31 March 2022.

The Scale-up SG scheme, which helps selected high-growth companies scale rapidly, has also been enhanced to cover up to 80% of qualifying costs until 31 March 2022.

From 16 February 2021 to 31 March 2022, Support for Job Redesign under the Productivity Solutions Grant (PSG) was enhanced, with the raising of the Government’s co-funding ratio from 70% to 80%, till end-March 2022.

Jobs and skills support for workers

An additional $5.4 billion was allocated to a second tranche of the Jobs and Skills Package, $5.2 billion of which went to the Jobs Growth Incentive (JGI). This extended the hiring window by seven months, up to end-September 2021. Companies hiring eligible locals are provided up to 12 months of wage support from the month of hire.

From 16 February 2021, the Senior Worker Early Adopter Grant was streamlined to a single tier to benefit companies who increase their internal retirement and reemployment ages by three years or more.

The Wage Credit Scheme was extended by one year at a co-funding level of 15%, providing co-funding of wage increments for employees earning a gross monthly wage of up to $5,000.

MOM also launched the Capability Transfer Programme (CTP), supporting companies in speeding up the transfer of global capabilities into Singapore.

Digitalisation and innovation

To build stronger digital capabilities, the government co-funded the adoption of digital solutions and new technologies like the Emerging Technology Programme and Digital Leaders Programme. The Chief Technology Officer as a Service (CTOaaS) was also launched to provide quick access to relevant digitalisation resources via a onestop touchpoint.

Investments were made in the area of innovation as well. The new Corporate Venture Launchpad provides co-funding for corporates to build new ventures through pre-qualified venture studios. Another new initiative was the Global Innovation Alliance (GIA), launched to catalyse cross-border collaboration between Singapore and global innovation hubs.

The Open Innovation Platform (OIP), which matches business seeking digital innovation with solution providers, has been enhanced with new features to enable better matching, testing and development.

What to expect for Budget 2022

According to figures released by the Ministry of Trade and Industry, Singapore's GDP grew 5.9 per cent year-on-year in the fourth quarter, bringing full-year growth for 2021 to 7.2 per cent. This growth, coupled with high vaccination rates, provides a strong foundation for Budget 2022.

In a February 3 speech, Finance Minister Mr Lawrence Wong noted that this year's Budget will address concerns over "more immediate issues" like the cost of living and provide support for sectors facing difficulties due to Covid-19.

“We will continue to grow and transform our economy, and create good jobs and opportunities for all Singaporeans,” he added.

SMBs can expect an announcement on the Goods and Services Tax (GST) rate hike. The plan to raise the GST by two percentage point (from 7 per cent to 9 per cent) was first announced in 2018 during then-Finance Minister Heng Swee Keat’s Budget speech. In his New Year message, Prime Minister Lee Hsien Loong indicated that the Government would have to “start moving” on the planned hike in Budget 2022.

A revised carbon tax level for 2024 will also be announced. The government will provide indications on what to expect up to 2030, giving businesses time to adjust.

"To help companies transit, they can tap incentives and grants by investing in production processes and equipment that will, for example, increase energy efficiency, or to capture carbon,” said Minister for Sustainability and the Environment Grace Fu, speaking at the St. Gallen Symposium 2022 Singapore Forum.