- In his Budget Statement for FY 2009 today, Minister for Finance Mr. Tharman Shanmugaratnam announced the Jobs Credit Scheme, as well as various tax rebates for individuals and businesses to cope with the current economic downturn.
- The Inland Revenue Authority of Singapore (IRAS) will administer the Jobs Credit Scheme. Details of the Jobs Credit Scheme and the administration of tax rebates and tax measures are given below.
A. Jobs Credit Scheme (automatically granted to eligible employers)
- The Jobs Credit Scheme is introduced to encourage businesses to preserve jobs in the downturn. Businesses will receive a cash grant based on the Central Provident Fund (CPF) contributions they have made for their existing employees. It provides a significant incentive for businesses to retain existing employees, and where their business warrants, to employ new ones. This is a temporary one-year scheme which will benefit about 120,000 employers.
- All businesses that make CPF contributions for their employees, with the exception of local and foreign government organisations, will be eligible to receive the Jobs Credit. The Jobs Credit will be paid out in four quarterly payments in Mar, Jun, Sep and Dec 2009.
- The qualifying periods for each payment and the corresponding payment dates are as follows:
|Qualifying period of wages to compute Jobs Credit||Deadline by which employers need to make CPF contributions||Jobs Credit payment date|
|Oct to Dec 08||14 Feb 09, on employees’ Jan salary||31 Mar 09|
|Jan to Mar 09||14 May 09, on employees’ Apr salary||30 Jun 09|
|Apr to Jun 09||14 Aug 09, on employees’ Jul salary||30 Sep 09|
|Jul to Sep 09||14 Nov 09, on employees’ Oct salary||31 Dec 09|
- The Jobs Credit is automatically granted to eligible employers. They do not need to apply for it. The Jobs Credit amount will be computed based on CPF contribution data.
Computation of Jobs Credit
- The Jobs Credit an employer can receive depends on the number of employees on its payroll (applicable to Singaporeans and Permanent Residents only) and the wage cost based on CPF contributions made for them in the preceding quarter (known as the Qualifying Period). The amount is calculated at 12% of the wage cost, subject to a monthly wage cap of $2,500 per employee.
- To receive the first payment in Mar 2009, employers should make their CPF contribution for their employees’ Jan 2009 payroll by 14 Feb 2009. IRAS will send a letter to all eligible employers in the last week of Mar 2009 informing them of the Jobs Credit they will receive on 31 Mar 2009. Employers can expect the Jobs Credit payment from IRAS via direct credit into their GIRO bank accounts or by cheque.
- Employers may visit IRAS’ website at http://www.iras.gov.sg for more information on the Jobs Credit Scheme. A calculator is available on the website for employers to compute the Jobs Credit amount that they can receive.
- For enquiries, please contact IRAS on 1800-3564055 or email to [email protected].
B. 2009 Budget Tax Rebates
One-off Individual Income Tax Rebate for YA 2009
- Taxpayers will enjoy a one-off income tax rebate of 20%, up to a cap of $2,000, for the tax payable for Year of Assessment (YA) 2009. Taxpayers do not need to apply for the rebate. IRAS will compute this rebate automatically and show the amount in
the Notice of Assessment for YA 2009.
Extension of up to 24-month GIRO instalment for Individual Income Tax (YA 2009)
- Taxpayers who have lost their jobs at any time during 2008 or 2009, for example due to retrenchment, can approach IRAS to re-work their GIRO instalment plans, up to a maximum of 24-month instalments for tax assessed in YA 2009. Please call 1800 356 8300 for assistance.
‘Defer GIRO’ Option for Individual Income Tax Instalment for YA 2009 – sign up from 9 Feb to 15 Mar 2009
- IRAS is introducing an option for individual taxpayers to defer their GIRO instalment so as to help ease the cash flow for taxpayers. This option is open to those who are on the monthly GIRO instalment scheme. Taxpayers who are eligible will receive the option letter from IRAS by Feb 2009. With this option, taxpayers will be able to defer their income tax instalment payment for three months (from May to Jul 2009) on their income tax payable for YA 2009. During these three months, no deduction will be made from the taxpayer’s GIRO account. Instead, their income tax GIRO deduction will be made in nine instalments from Aug 2009 to Apr 2010. Taxpayers who are currently not on the GIRO instalment scheme can also sign up for this option by first sending in their GIRO application form to IRAS.
- Taxpayers can sign up for this ‘Defer GIRO’ option from 9 Feb to 15 Mar 2009 at http://www.iras.gov.sg/defergiro. Taxpayers will be granted the instalment deferment once they have signed up. A revised GIRO plan will be sent by Jul 2009. For enquiries on ‘Defer GIRO’, please call 1800-3564055 or email to [email protected].
40% Property Tax Rebate for Owner-Occupied Residential Properties, Commercial and Industrial Properties
- The Government will grant a property tax rebate of 40% on owner-occupied residential properties for calendar year 2009. The 40% rebate will be on top of the existing annual rebates that range from $25 to $150 as well as the $100 rebate given out for the years 2008 and 2009.
- Similarly, the Government will grant a property tax rebate of 40% on all commercial and industrial properties for calendar year 2009.
- Property owners who have paid their 2009 property tax will receive a tax refund from IRAS. The refund cheques will be sent to property owners from Apr 2009 onwards. Property owners who are paying their 2009 property tax by GIRO will receive their revised property tax bills together with the revised GIRO instalment plans, from Apr 2009.
- Owners who have not paid their 2009 property tax may proceed to pay the reduced property tax after taking into account the 40% property tax rebate. For enquiries, owners may email to [email protected] or call us on 1800 356 8600.
Property Tax Deferral for Land Approved for Development – For Businesses
- The 2009 property tax on land approved for development will be deferred for up to two years with effect from 22 Jan 2009. This is part of the Government’s efforts to ease cash-flow for businesses during the present economic downturn, and to help position companies to be ready for the upturn.
- The deferment will be given to business owners. Individual owners of land, clans and associations are not included.
- Businesses need to apply for this deferral. Application details are on http://www.iras.gov.sg.
Deferment of Increase in Assessment Rate for Hotel Rooms
- The Government has also decided to defer the increase in fixed percentage rate for computing Annual Values of hotel rooms for one year. The rate for 2009 will therefore remain at 20% of gross room receipts.
Corporate Income Tax Rate cut – 18% to 17% wef YA 2010
- The corporate income tax rate will be reduced to 17% with effect from YA 2010.
Enhanced Carry Back Relief
- Currently, under the Carry-Back Relief system, businesses are able to offset their current year's unabsorbed trade losses and capital allowances (“qualifying deduction”) against their income for the immediate preceding YA. To help businesses cope with the difficult economic environment, the Carry-Back Relief system will be enhanced for YA 2009 and YA 2010. For these two YAs, the limit on the amount of qualifying deductions will be raised from the current $ 100,000 to $ 200,000 for each YA, and Carry-Back will be allowed for up to the three YAs preceding the YA in which the qualifying deductions arise, instead of just one preceding YA. Businesses will also now be able to submit their estimated amount of Carry-Back Relief in the Loss Carry-Back election form after their financial year-end but before the filing of their income tax returns for YA 2009 and YA 2010.
- IRAS will, subject to conditions, amend the assessment(s) for the relevant preceding YA(s) within one month from the date of receipt of the election form. The businesses will be able to receive a refund of the tax previously paid (net of any other outstanding tax liabilities) from IRAS within 30 days from the date of the amended assessment(s). More details of the Enhanced Carry-Back Relief system will be available at http://www.iras.gov.sg shortly.
Other Budget 2009 Tax Changes
- For a comprehensive list of tax changes announced in the Budget 2009, please go to Overview of Tax Changes Announced in Budget 2009.
For media queries, please contact:
Ms Yvonne Yim
Principal Corporate Communications Officer
Inland Revenue Authority of Singapore
Tel: 6351 2076/6351 2075
Email: [email protected]
Inland Revenue Authority of Singapore