Higher foreign worker levy rebates for essential sectors

Rise from $90 to $250, till Dec, aims to help 15,000 firms deal with Covid-19 labour crunch

Foreign worker levy rebates are being increased from $90 to $250 a month to bring extra relief to about 15,000 companies in the construction, marine shipyard and process sectors.

The move, announced by the Ministry of Manpower (MOM) yesterday, is to help firms in the immediate term, given the manpower shortages and increased costs as Singapore tightens its border measures. The higher rebates will apply from this month to December.

These sectors play an essential role in Singapore's development, it said, adding that government agencies are working to transform these businesses and reduce their reliance on manpower through the industry transformation maps. This will help the sectors become more resilient to future shocks.

"However, these efforts will take time to bear fruit," MOM said in a statement. "In the immediate term, the increased costs continue to weigh heavily on these firms."

The Government will decide closer to December if there is a need to extend the rebates.

The first round of higher rebates for this month will be paid out next month.

Employers can consider using the rebates to retain existing workers and bring in work permit holders from lower-risk countries or regions, the ministry said.

The rebates are part of a broader package of measures to support the affected sectors. For instance, the authorities recently made it easier for employers to hire workers from China by easing a skills certification rule, and have provided further contractual relief for prolongation costs for public sector construction contracts.

The news comes after MOM's move on Friday to stop accepting new entry applications for work pass holders from higher-risk countries or regions.

It is also reducing entries from these areas, meaning that some work pass holders who had earlier obtained approval will be rescheduled to arrive in later weeks.

India yesterday reported its highest single-day Covid-19 death toll of 4,187 fatalities over the past 24 hours, taking the overall toll close to 240,000. It also reported more than 400,000 new infections.

Closer to home, Malaysia's top health official yesterday said new cases could hit 7,000 a day by the end of this month.

Its Health Ministry's director-general Noor Hisham Abdullah had also warned on Friday that critically ill patient numbers had hit a record high of 506 admissions, and said the government is adding more beds to intensive care units.

Businesses here affected by the border restrictions said the move to increase the rebates will help them manage short-term costs.

Integrate Engineers managing director Vincent Ting estimated the higher rebates would shave 38 per cent off his current total levy payment, and 7 per cent off his total foreign manpower costs - a significant difference.

Mr Kenneth Loo, executive director of Straits Construction, added: "At this point in time, because the industry is not in good shape, any help definitely has an impact."

But firms also have their eye on the longer term.

"If there is more work that is available to local contractors, and if we can land some, perhaps we will be able to better manage," said Mr Fabian Loi, general manager at Kuan Aik Hong Construction.

Mr Ting said he was also concerned about his workers. "Right now, they go to work, then go back to their dormitories, and they can't go out. It's hard on them."

Mr Kurt Wee, president of the Association of Small and Medium Enterprises, said the higher rebates will help in mitigating delays and cost overruns.

"But we believe a substantial part of the costs will end up still being borne by the industry."


  • Additional reporting by Justin Ong and Jolene Ang

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A version of this article appeared in the print edition of The Sunday Times on May 09, 2021, with the headline Higher foreign worker levy rebates for essential sectors. Subscribe