Service firms will be able to pay less in levies for work permit holders classified as skilled workers according to new criteria set out by the Manpower Ministry. Acting Minister for Manpower Tan Chuan-Jin announced this in Parliament on Thursday.

"This is to encourage employers to retain their Work Permit holders, train them up, so that they can become more productive and in the process also command higher salaries," he said.

About 7,800 work permit holders in the service sector will be upgraded to skilled status when the new criteria comes into effect July 1. Work permit holders in the service line will be granted skilled status if they earn a fixed monthly salary, including a fixed allowance, of at least $1.600. They must also have worked in Singapore for at least four years.

Service firms will have to pay progressively more in levies for unskilled Work Permit holders by 2015, while the levies for skilled work permit holders will remain the same. By 2015, services firms will have to pay $450 to $800 in monthly levies for each unskilled work permit holder. The monthly levies for skilled work permit holders will remain between $300 and $600.