SINGAPORE - Businesses will get a rebate on corporate income tax and some enhanced tax treatments in moves aimed at improving their cash flow.
Companies will be granted a rebate of 25 per cent of tax payable, capped at $15,000, for the year of assessment 2020 - a move that will cost the Government about $400 million.
The tax treatment enhancements include automatic extension of interest-free instalments by two months for payment of corporate income tax on estimated chargeable income.
This must be filed within three months of a company's financial year end.
Companies will also be allowed to carry back the unabsorbed capital allowances and trade losses of up to the three immediate preceding years of assessment.
They can opt to accelerate the write-off of the costs of acquiring plant and machinery and renovation incurred for the year of assessment 2021.
These measures are aimed at helping enterprises such as hotels take advantage of this lull period to carry out upgrading work and be better prepared for the rebound.
The Enterprise Financing Scheme's working capital loan component will be enhanced for one year to help businesses access working capital more easily.
The maximum loan quantum under the Enterprise Financing Scheme - known as the SME Working Capital Loan - will be raised from $300,000 to $600,000. The Government will increase its risk-share on these loans to 80 per cent from the current 50 per cent to 70 per cent.
With a large part of the risk taken up by the Government, financial institutions will do their part to support small and medium-sized enterprises (SMEs), said Finance Minister Heng Swee Keat on Tuesday (Feb 18).
The Enhanced SME Working Capital Loan will start in March and will be available for one year.
The SME Working Capital Loan was introduced in 2016 to help SMEs access financing for their working capital needs. This was subsumed under the Enterprise Financing Scheme last October.