Budget 2024: Companies to get corporate income tax rebate of up to 50 per cent

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

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

This is part of a $1.3 billion package 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.

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

The 50 per cent corporate income tax rebate is capped at $40,000.

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

Thus, 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 funding costs can tap the Enterprise Financing Scheme (EFS) – SME Working Capital Loan, which has been enhanced by permanently raising the maximum working capital loan quantum to $500,000.

Meanwhile, the enhanced maximum trade loan quantum under the Enterprise Financing Scheme - Trade Loan (EFS-TL) of $10 million will be extended to March 31, 2025. The EFS-TL’s 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 (SFEC) to June 30, 2025.

“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.

Costs of doing business have jumped 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, while central banks worldwide have raised interest rates.

The scheme helps businesses seeking to boost productivity and transform the workforce by redesigning jobs. It offers a one-off credit of up to $10,000 to cover up to 90 per cent of out-of-pocket expenses.

DPM Wong said the credit provides additional support for eligible employers to cover their out-of-pocket expenses when they embark on workforce and business transformation.

“With this extension, employers will have another year to claim any unused credit,” he said.

While the ESP measures will provide near-term support, DPM Wong stressed that they are not permanent solutions.

“Over the longer term, the best way to deal with inflation is to ensure that our firms and workers are more productive, and that real incomes continue to rise sustainably,” he said.

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