Foreign worker levy waiver, rebates to be extended

$320m set aside to cover rebates for construction, marine shipyard, process sectors

With the extension of support schemes, the firms will get a full waiver for the levies due in July, August and September. PHOTO: ST FILE

Firms in the construction, marine shipyard and process sectors badly hit by the coronavirus crisis will get more help to defray their labour costs, with the Government waiving more months of the foreign worker levy and giving more levy rebates.

The Ministry of Manpower (MOM), announcing the extension of the support schemes yesterday, said that $320 million will be set aside to cover the rebates.

This increased support is in addition to the $1.36 billion Construction Support Package announced on June 27, and comes as the Government works to clear all foreign worker dormitories of the coronavirus by Aug 7 so that workers can progressively return to work.

Manpower Minister Josephine Teo said in a Facebook post yesterday: "As we work towards establishing safe living and working conditions for some degree of normalcy to return, there have been challenges and setbacks along the way.

"It has been an enormous task for our officers at the various agencies, but these have been unprecedented times, and we are all adapting and doing our best as the situation evolves."

The majority of the 15,000 firms in the construction, marine shipyard and process sectors continue to face financial difficulties as they are unable to resume work due to Covid-19 restrictions, noted the MOM, adding that the situation is likely to persist until all dormitories are cleared of the virus this month.

With payments tied to completion milestones and high overheads, cash flow has become a major concern for many firms, and the extension of the waiver and also levy rebates is meant to "ensure that these sectors retain enterprise capabilities to emerge stronger from the Covid-19 crisis", said the MOM.

As part of the Fortitude Budget presented on May 26, all firms in the sectors received a full waiver of the foreign worker levy due in June, and a 50 per cent waiver for the levy due last month.

But now, the firms will get a full waiver for the levies due in July, August and September.

This will taper to 75 per cent for October, 50 per cent for November, and 25 per cent for December as the sectors restart and activity picks up, said the MOM.

Under the Fortitude Budget, the firms had also been given rebates on the levy for each work permit or S Pass holder at $750 in June and $375 last month.

With the extension, the $375 rebate will be extended for another two months to August and September, replacing the original $90 rebate for each work permit holder for both months. The $90 rebate, which was meant to help the firms adjust to safe management measures as they reopened, will continue from October this year till December next year.

Firms in the sectors said the levy waiver and rebates would tide them over for a few more months, but noted they would have to restart projects within the next three months to ensure survival.

Mr Lee Kay Chai, executive director of Lian Soon Construction, said: "We need business to go back to normal. If not, we are very dependent on the Government to help us. Not many companies can sustain themselves as much of their reserves have already been used up from April to July."

Acknowledging the challenges faced by firms adjusting to the changing situation on the ground and the various advisories by the authorities, Mrs Teo said: "Much as we want to speed things up, we have to be sure we do a thorough job, so that the sector is not affected by another outbreak."

She added: "The Government remains committed to helping the sector as best as we can, within the limits of our resources."

Being able to start work safely is what the firms are working towards. Mr Simon Kuik, president of the Association of Singapore Marine Industries, said: "We cannot afford a second wave of outbreak as this also means prolonged business disruption and additional costs which companies cannot sustain."

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A version of this article appeared in the print edition of The Sunday Times on August 02, 2020, with the headline Foreign worker levy waiver, rebates to be extended. Subscribe