ANNOUNCEMENT 22 Feb 2010

In February 2010, the government of Singapore announced a change for the labour market access of foreign workers.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



2010 budget speech. Available at http://www.singaporebudget.gov.sg/budget_2010/speech_toc/download/FY2010_Budget_Statement.pdf

More information on the budget:
http://www.singaporebudget.gov.sg/budget_2010/speech_toc/pc.html

National Productivity Fund Act from 31 December 2011:
http://statutes.agc.gov.sg/aol/search/display/view.w3p;page=0;query=DocId%3A8563463d-e797-4f02-9ba6-e582879a39e9%20%20Status%3Ainforce%20Depth%3A0;rec=0;whole=yes

Ministry of Manpwer. (23 February 2010). Changes To Foreign Worker Levy For Sustainable Growth. Available at http://www.mom.gov.sg/Home/Press_Release/Pages/20100223-FW_Levy.aspx

Ministry of Manpower. (23 February 2010). Annexes - Changes to FW Levy. Available at http://www.mom.gov.sg/Home/Press_Release/Documents/Annexes-%20Changes%20to%20FW%20Levy%20%28230210%29.pdf

Ministry of Manpower. (20 March 2010). FAQs for foreign worker levy. Available at http://mom.gov.sg/Home/Press_Release/Documents/FAQs%20for%20foreign%20worker%20levy%20changes.pdf


Inception date: 01 Apr 2010 | Removal date: open ended
Still in force

State loan

On 22 February 2010, the Singaporean Finance Minister presented the annual budget in front of the parliament.
 
Introduction of the Productivity and Innovation Credit scheme (PIC)
The budget included the introduction of the PIC scheme, covering tax benefits for investments in the following six areas:

  • Research & Development;
  • Registration of intellectual property - including patents, trademarks, and designs; 
  • Acquisition of intellectual property - for example, when a company buys a patent or copyright for use in its business;
  • Design activities;
  • Automation through technology or software; and
  • Training of employees.

Any company located in Singapore may deduct 250% of their expenditures worth up to 300'000 SGD in any of the six areas. Furthermore, small and medium-sized entreprises will be allowed up to 300'000 SGD of the Productivity and Innovation Credit into a cash grant worth up to 21'000 SGD. The scheme will cost 480 million SGD each year (about 340.6 million USD using the exchange rate on the day of the announcement).
The scheme was later amended in the budgets for 2011 and 2012 (cf. Related Measures).
 
National Productivity Fund
The Finance Minister also announced the National Productivity Fund which would invest 1 billion SGD over the next five years into companies investing in their productivity. He announced the Fund would help particularly those sectors with a lot of room for productivity improvements. Here, he mentioned the construction sector, which should get 250 million SGD from the Fund. A separate act concerning the National Productivity Fund was introduced on 31 December 2011 (cf. Sources). The Act does not specify any areas.
 
Migration restrictions
The budget included also a number of migration restrictions. They were further specified on 23 February 2010, when the Ministry of Manpower released its plans to reduce Singapore's dependence on foreign labor. As a key measure, the Ministry will increase the levies on so-called "S Pass" work permits starting 1 July 2010.
Up from S$50 per month per worker, companies will be subject to a higher levy depending on the ratio of S pass holders in their workforce. Companies with a ratio of less than 20 percent will be charged S$100/month from 1 July 2010. Companies exceeding this ratio will have to pay S$120/month and worker.
In subsequent steps until July 2012, these levies will be increased further to S$150/month and worker for companies employing 15 percent or less S pass holders. Companies with S pass holders accounting for more than 15 percent of the total workforce will be subject to a levy of S$250/month and worker.
S passes were introduced by the Singaporean government to allow companies to hire foreign workers of medium skills with earnings no less than S$ 1'800/month. S pass holders may not exceed a quarter of a company's workforce.
 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A
Inception date: 01 Apr 2010 | Removal date: open ended
Still in force

Labour market access

On 22 February 2010, the Singaporean Finance Minister presented the annual budget in front of the parliament.
 
Introduction of the Productivity and Innovation Credit scheme (PIC)
The budget included the introduction of the PIC scheme, covering tax benefits for investments in the following six areas:

  • Research & Development;
  • Registration of intellectual property - including patents, trademarks, and designs; 
  • Acquisition of intellectual property - for example, when a company buys a patent or copyright for use in its business;
  • Design activities;
  • Automation through technology or software; and
  • Training of employees.

Any company located in Singapore may deduct 250% of their expenditures worth up to 300'000 SGD in any of the six areas. Furthermore, small and medium-sized entreprises will be allowed up to 300'000 SGD of the Productivity and Innovation Credit into a cash grant worth up to 21'000 SGD. The scheme will cost 480 million SGD each year (about 340.6 million USD using the exchange rate on the day of the announcement).
The scheme was later amended in the budgets for 2011 and 2012 (cf. Related Measures).
 
National Productivity Fund
The Finance Minister also announced the National Productivity Fund which would invest 1 billion SGD over the next five years into companies investing in their productivity. He announced the Fund would help particularly those sectors with a lot of room for productivity improvements. Here, he mentioned the construction sector, which should get 250 million SGD from the Fund. A separate act concerning the National Productivity Fund was introduced on 31 December 2011 (cf. Sources). The Act does not specify any areas.
 
Migration restrictions
The budget included also a number of migration restrictions. They were further specified on 23 February 2010, when the Ministry of Manpower released its plans to reduce Singapore's dependence on foreign labor. As a key measure, the Ministry will increase the levies on so-called "S Pass" work permits starting 1 July 2010.
Up from S$50 per month per worker, companies will be subject to a higher levy depending on the ratio of S pass holders in their workforce. Companies with a ratio of less than 20 percent will be charged S$100/month from 1 July 2010. Companies exceeding this ratio will have to pay S$120/month and worker.
In subsequent steps until July 2012, these levies will be increased further to S$150/month and worker for companies employing 15 percent or less S pass holders. Companies with S pass holders accounting for more than 15 percent of the total workforce will be subject to a levy of S$250/month and worker.
S passes were introduced by the Singaporean government to allow companies to hire foreign workers of medium skills with earnings no less than S$ 1'800/month. S pass holders may not exceed a quarter of a company's workforce.
 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.

 
N/A
 
N/A