Singapore’s Plans To Soften COVID-19’s Impact On Businesses
The coronavirus, otherwise known as COVID-19, is turning out to be a global menace, and its effect on the global economy has become evident. Stocks and currencies in many countries are tanking due to the fact that the virus and the concerns of its spread have certainly slowed down global trade, and many businesses are now in the crosshairs of Coronavirus’ impact.
How are Singapore businesses affected by the Coronavirus
Singapore’s government has expressed its interest in helping businesses in the country to stay afloat even with the negative impact of COVID-19 threatens their operations. But first, we need to understand how the coronavirus affects Singapore-based businesses in order to understand the government’s plan of action.
Singapore is one of the main tourist destinations for Chinese tourists. Unfortunately, the coronavirus originated from China, and Singapore was forced by circumstances to institute a travel ban preventing Chinese tourists from visiting. One out of every tourist that visits Singapore is from China, which means that the tourism industry has taken a huge hit. Tourism also happens to be one of the major revenue-earning industries, which also means that it employs a lot of businesses, especially the hotel and hospitality sector.
COVID-19’s scope of interest spans beyond the tourism industry. Businesses that heavily rely on imports not only from China but other countries are also threatened by the situation. This is because governments are on high alert, and right now, importing products means higher exposure risk. Consumers have also changed their spending habits because of the coronavirus. For example, people are trying to avoid crowded public places to minimize the risk of exposure; thus, many businesses are suffering since they lack adequate clients, thus, business has been slow.
Singapore’s support and stabilization package
Singapore’s government has been busy coming up with measures aimed at helping businesses to shield themselves more effectively from the effects of the Coronavirus outbreak. Here are some of those steps that are part of Singapore’s 2020 budget for shielding against the impact of COVID-19.
- The Wage Credit Scheme
This is an enhanced version of an already existing scheme and it is aimed at co-funding wage increments for Singapore residents that earn as much as $4,000 every year. However, the new wage increment adjustments will raise the limit to accommodate those earning up to $5,000. More than 700,000 Singapore residents are expected to benefit from this.
- Tax reliefs to target key sectors affected by the coronavirus
The government will offer tax rebates to sectors that are the most affected by the coronavirus. Here are some of those sectors and the respective rebates they will receive.
- The tourism industry will receive a 30 percent tax rebates. This includes businesses such as serviced apartments and hotels. Regional terminals and international cruises will receive 15 percent of those rebates while integrated resorts will receive 15 percent.
- Businesses that deal with point-to-point transport will receive a support package worth $77 million. This includes private car hire services and taxi services, and this package will be made available for those working within the segment even during the COVID-19 outbreak.
- The aviation industry will also benefit from the tax relief, more specifically, Changi Airport, which will get a 15 percent tax break. This tax relief will also be extended to cargo agents and ground handling agents.
- Businesses in the food and retail industry will also receive tax relief. Qualifying businesses in the retail industry will receive a 15 percent rebate on property tax. HDB tenants will receive half-month rental waivers while markets by NEA and hawker center stakeholders will receive rental waivers for the entire month.
Budgeting for the Coronavirus
So far Singapore’s government has allocated $5.6 billion in its 2020 budget as part of the funds for its Care and Support package, as well as Stabilization and Support Package. $4 billion out of the $5.6 billion will be allocated to the Stabilization and Support Package, whose role is to provide reskilling opportunities and wage support, which will support workers in retaining their jobs. It will also be used to support businesses that have operating costs and cash flow costs. This includes the key sectors previously mentioned, such as point-to-point transport, food services, aviation, and tourism.
The remaining $1.6 billion will be allocated to the Care and Support package, which is aimed at providing support to less-privileged Singapore residents. This includes those who earn very little annual salaries. Heng Swee Keat, Singapore’s Deputy Prime Minister and Minister of Finance is confident that the steps taken by the government will go a long way in helping the country to cope, especially in these tough times.
Singapore-based businesses also have to do their part
The burden of making sure that Singapore businesses survive the weight of the coronavirus threat on the economy is not just a responsibility of the government but also the business owners. The government is doing its best to support the businesses and the people through policy adjustments. Business owners also have to come up with strategies that they can execute to protect their businesses and make sure that they survive the Coronavirus threat and any other threat that may come in the future. There are numerous ways in which businesses can achieve this.
- Businesses should future-proof their operations by leveraging new technologies and embracing new business models. This will help them to remain operational over the long-term.
- Diversified business operations can help a business overcome the effects of COVID-19. The outbreak has already started to disrupt the supply of goods from some markets. Having diversified business operations may include having diverse channels where a business can source inputs through different channels and from different markets.
- Proper cash flow management may also help a business to weather disruptive market conditions. Cash flow management should thus focus on things like preparedness so that a business will manage to remain operational even if it faces pressure or disruptive market forces.
- Businesses should also ensure that they train workers so that they are able to handle business processes with more efficiency, and also to leverage opportunities that may generate more growth for the business.
Singapore is determined to overcome the threat of the coronavirus by doing everything necessary to support businesses and the local population. In short, the government has demonstrated its concern in making sure that the economy remains strong.