Budget 2024: $1.3 billion package to help companies deal with higher costs

Source: The Straits Times
Author: Ovais Subhani

SINGAPORE - The Government has set aside a package that will provide $1.3 billion to help companies manage the rising cost of doing business.

Deputy Prime Minister Lawrence Wong, who is also Finance Minister, said that the Enterprise Support Package (ESP) introduced in Budget 2024 is aimed at providing immediate relief to businesses struggling with paying higher wages to their staff, and larger rental and utility bills.

He said the measures in the ESP are tilted towards companies making an effort to restructure and transform while dealing with 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.

Cost of doing business have surged after inflation in Singapore surged in 2022 to levels not seen in more than a decade. Inflation has since eased but prices of raw materials and other inputs remain elevated, which central banks worldwide have hiked interest rates.

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

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

However, since not every company makes a profit every year, some risk being left out of the scheme.

Hence the Government has decided to pay a minimum of $2,000 in cash to companies that employed at least one local employee in 2023.

Businesses facing higher costs of funding can tap into the Enterprise Finance Scheme (EFS-TL) which has been enhanced by permanently raising the maximum working capital loan quantum to $500,000.

The enhanced maximum trade loan quantum will be extended to March 31, 2025. The EFS-TL previous extension in Budget 2023 is set to expire on March 31, 2024.

The third component of the Enterprise Support Package is the move to extend the SkillsFuture Enterprise Credit (SPEC) to June 30, 2025.