2022 Singapore Budget: Key Highlights & Summary -

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2022 SINGAPORE BUDGET: KEY HIGHLIGHTS AND SUMMARY

On 18 February 2022, Finance Minister Lawrence Wong delivered the 2022 Budget statement, outlining the key areas to support businesses, workers and Singaporeans as the nation continues its recovery amidst the Covid-19 pandemic.

To help the SACEOS and MICE community better understand the impact of the Budget on their businesses and workforce, we have summarised the relevant and key areas for your convenience:

S$500m Jobs and Business Support package

The government announced a new Small Business Recovery Grant of $1,000 payout per local employee for SMEs (up to 10 employees) in sectors most affected by COVID-19. The grant covers the following:

1) Purpose-built MICE venue operators.
2) MICE and tourism event organisers who are:

Impacted by the deferment/cancellation/loss of sales of at least one MICE/leisure event with at least 20% foreign attendees (residing outside Singapore) originally scheduled in Singapore between 1 Feb 2020 and 31 Dec 2020; and
Derive more than two-thirds of their revenue from MICE/leisure events with at least 20% foreign attendees (residing outside Singapore) in 2018 or 2019; and
Classified under SSICs 82301, 82302, or 82303

GST

The GST increase will be delayed to 2023 and the increase will be staggered over two phases.
The first increase will take place on 1 Jan 2023, from 7 percent to 8 percent while the second increase will happen on 1 Jan 2024, from 8 percent to 9 percent.

Higher minimum qualifying salary for EP, SP applications

Employment Pass (EP) holders:

From September 2022, the minimum qualifying salary for new EP applicants will be raised from S$4,500 to S$5,000.
The qualifying salaries for older EP applicants, which increase progressively with age, will also be raised

S Pass holders:

The minimum qualifying salary for new applicants will be raised from the current S$2,500 to S$3,000 in September this year.
The qualifying salaries for older S Pass holders will also be raised in tandem.
Thereafter, the minimum qualifying salary for new S Pass applicants will be raised in September 2023, and again in September 2025.
The Government will also progressively raise the Tier 1 levy from the current S$330 to S$650 by 2025 to better manage the flow of S Pass holders.

Work permit holders:

The Dependency Ratio Ceiling (DRC) – the maximum permitted ratio of foreign workers to the total workforce that a company in the specific sector is allowed to hire – will be reduced from 1:7 to 1:5 from 1 Jan 2024.
A new levy framework will also replace the current Man-Year Entitlement (MYE) framework to encourage firms to support more offsite work, and also employ more higher-skilled work permit holders for increased manpower. These adjustments will mainly be applied to the broad middle of the workforce.

CPF contributions

Singapore will continue to increase the employer and employee CPF contribution rates for workers aged 55 to 70. The first increase was implemented this year, and the next increase will be in 2023.
Workers aged 55 to 70 will witness a total increase of three to four percentage points in their CPF contribution rates over the next two years.
The CPF Basic Retirement Sum (BRS) will be raised by 3.5 per cent per year for the next five cohorts turning 55 from 2023 to 2027. There is no requirement for members to top up their CPF if they are unable to set aside their BRS.

Support for workers

The Progressive Wage Model will be extended to workers in the retail, food services and waste management sectors over the next two years.
The Progressive Wage Model will also be extended to in-house cleaners, security officers, landscape workers, administrators and drivers across all sectors.
For companies that employ foreign workers, they will be required to pay their local employees the local qualifying salary (currently set at S$1,400 per month) at least.

Government to invest in new capabilities
Digital capabilities:

One of these key initiatives is to upgrade its broadband infrastructure and invest in future technologies like 6G to aim to improve the broadband speed. There will also be new possibilities for augmented and virtual reality tools to make optimise processes.
The government is putting in an additional S$200m to implement greater digital and automation solutions for businesses and workers. They will also be pushing for more pervasive innovation and a record S$25b will be set aside for further R&D under the RIE2025 strategy.

Local enterprise:

The government also aims to strengthen the local enterprise ecosystem, and about S$600 million will be set aside to expand the range of available solutions under Productive Solutions Grant (PSG), and push for greater innovation of productivity solutions by SMEs over the next four years.

Education

The government also wants to ‘invest significantly’ in education and will review the programming in Institutes of Higher Learning to enhance their provision of quality continuing education and training. Institutes of Higher Learning (IHLs), including autonomous universities, will be transformed into institutes for continual learning.

Skills development

The Skills Development Levy requirement will be waived for the period of 1 Jan to 31 Dec 2022. This is estimated to double the number of eligible employers from 40,000 to 80,000, allowing more workers to benefit from this. The deadline to claim the credit will be extended by a year to 30 Jun 2024.

A greener Singapore

The Government will issue S$35 billion of green bonds by 2030 to fund the public sector of green infrastructure projects.
Traditional sectors like aviation, energy, and tourism will see a ‘greening’ over the next ten years, while emerging green sectors like green finance and carbon services will become more prominent.
Singapore will also raise the carbon tax in phases from 2024 onwards, to between S$50 and S$80 per tonne by 2030 – up from S$5 a tonne now.

Useful links:
MOF: Budget 2022 Booklet
MOF: Budget 2022 Infographic for Businesses
MOF: Support for Businesses
MOF: Jobs and Business Support Package

If you need any support or assistance, please contact us at secretariat@staging.saceos.org.sg