3-month deferral of income tax payments for businesses, self-employed as part of Covid-19 support

These income tax deferments will help to ease cash flow on top of wage support schemes announced previously, said Deputy Prime Minister Heng Swee Keat. PHOTO: ST FILE

Business Correspondent

Updated

Published

Mar 26, 2020, 04:17 PM

SINGAPORE - Businesses and self-employed persons will be granted a three-month deferment on income tax payments to ease immediate cash flow concerns.

All companies with corporate income tax payments due in April, May and June will be granted an automatic three-month deferral, and the payments will be collected from July instead.

This is in addition to the 25 per cent tax rebate, capped at $15,000, for the year of assessment 2020 announced at last month's Budget on Feb 18.

Self-employed persons will also be granted a three-month deferral on personal income tax payments.

All freelancers are due to file their personal income tax returns for year of assessment 2020 by April 18, and they will be granted an automatic deferral of payments due between May and July.

These income tax deferments, announced as part of the over $48 billion Supplementary Budget, will help to ease cash flow on top of wage support schemes announced previously, said Deputy Prime Minister Heng Swee Keat in Parliament on Thursday (March 26).

He noted that cash flow is a key challenge faced by business owners amid the Covid-19 outbreak.

"For businesses, 'cash is king', and many have called for more timely assistance," he said. "We are doing out best to flow the payouts under the wage support schemes quickly."

By the end of May, a total of $5.6 billion will be paid out to employers under the Jobs Support Scheme and Wage Credit Scheme.

The Jobs Support Scheme was enhanced on Thursday and will now offset between 25 and 75 per cent of the wages of every employee who is a Singaporean or permanent resident for nine months, up to a monthly cap of $4,600.

The Wage Credit Scheme, enhanced at last month's Budget, co-funds wage increases for Singaporean employees earning a gross monthly wage of up to $5,000 - up from the previous ceiling of $4,000. The Government is funding 20 per cent and 15 per cent for 2019 and 2020 qualifying wage increases respectively.

This means that businesses will receive around $16.2 billion through these two schemes by October this year, Mr Heng said.