Singapore Extends Jobs Credit Scheme

by Mary Swire, Tax-News.com, Hong Kong

19 October 2009

The Singapore government has announced it will extend the Jobs Credit Scheme (JCS) for six months by providing another two payments in March and June 2010.

The JCS formed part of the 2009 budget, introduced in response to the global economic crisis. It was aimed at helping to ease companies’ operating costs and avoid large lay-offs of workers in the crisis. With the economy now having stabilized, the government has said, it is timely to phase out the JCS and adopt more targeted measures to support economic restructuring and enhance productivity.

In that case, while the JCS is currently calculated based on 12% of the first SGD2,500 (USD1,800) monthly salary of each eligible employee, the two additional payouts by the Inland Revenue Authority of Singapore in 2010 will be at stepped down rates. In March 2010, there will be a payment of 6% of salary of employees on the payroll in January 2010; and in June 2010, there will be a payment of 3% of salary of employees on the payroll in April 2010.

All other eligibility criteria remain the same. The extension of the JCS will cost SGD675m. The JCS this year was funded from past reserves but, with the global economic situation no longer such a risk, the government has decided to fund the additional payments in 2010 from the existing budget.

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