Singapore Budget 2015: Planned increase in levies for S Pass and work permit holders deferred

SINGAPORE - This year's round of announced levy increases for S Pass and work permit holders in every sector will be deferred, said Finance Minister Tharman Shanmugaratnam.

This will give companies, especially SMEs, more time to adapt to "the new normal of a permanently tight labour market", where it is both difficult to find Singapore employees, and foreign workers are no longer an easy solution, he said.

Foreign worker levies for work permit holders in the manufacturing sector will also be frozen at July 2014 levels this year and next year.

He told Parliament during his Budget speech that the pace of increase in foreign worker levies will slow. But he emphasised that Singapore "is not changing direction", and will continue to reduce its reliance on manpower, especially unskilled foreign workers.

In the construction sector, the Government wants to encourage firms to hire more higher skilled workers.

For higher-skilled R1 workers, the man-year entitlement waiver levy rate will be lowered from $750 to $600 from July 1.

For basic-skilled R2 work permit workers, the levy will be raised from $550 to $650 in 2016, and then $700 in 2017.

Except for the construction industry, the net inflow of foreign workers has slowed from 60,000 in 2011 to just over 16,000 last year, he said.

In the construction sector, the growth was around 10,000 last year, below that of the previous two years.

chuimin@sph.com.sg