5 key takeaways for marketers from Budget 2024

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Singapore Deputy Prime Minister and Finance Minister Lawrence Wong today delivered the 2024 budget at Parliament. The budget outlines the steps Singapore must take in response to challenges ahead. DPM Wong acknowledged that the past year has not been easy, but with Singapore's strong rebound after COVID-19, the government was able to enhance its assistance measures.

However, the outlook for 2024 remains mixed. This is likely impacted by geopolitical risks such as the wars in Europe and the Middle East. That said, global inflationary pressures are expected to recede further, and the government expects higher GDP this year.

Below, MARKETING-INTERACTIVE lays out some of the key takeaways from the Budget 2024 that business should focus on.

Don't miss: 5 key takeaways for the marketing community from Budget 2023

1. SG$1.3 billion support for businesses.

In efforts to support businesses in managing rising costs, the Enterprise Support Package will provide S$1.3billion to support companies. All companies will receive a 50% corporate income tax rebate, capped at SG$40,000. Additionally, there will be a minimum of SG$2,000 in cash payouts for companies that hired at least one local employee in 2023.

The government will also enhance the Enterprise Financing Scheme to help Singapore enterprises' financing needs. The maximum working capital loan quantum will be permanently raised to SG$500,000. DPM Wong also announced an extension on the n the SkillsFuture Enterprise Credit until June 2025, giving employers an extra year to claim their credits and make full use of it in a "more challenging operating environment."

2. Developing local enterprises through the enhancement of grants

DPM Wong said that the government will continue to do more to invest in and strengthen local enterprises. This looks like helping smaller firms harness technology through pre-approved solutions that are tailored for the needs of specific industries. This, according to DPM Wong, enables the SMEs to "plug and play" and quickly achieve greater efficiency and productivity gains.

The government is also providing customised support to help SMEs scale up. One way for Singapore companies to level up quickly is to partner with multinational firms based in Singapore. He added that there the Partnerships for Capability Transformation (PACT) scheme support such collaborations.

That said, the Singapore government will enhance PACT to support partnerships in more areas - namely capability training, internationalisation, and corporate venturing.

DPM Wong also announced that he will extend the enhanced support for green loans under the Enterprise Financing Scheme. This is to help more local SMEs adopt green solutions.

In tandem, he will enhance the Energy Efficiency Grant introduced in 2022. The enhanced grant will extend to more sectors including manfacturing, construction, maritime and data centres and their users.

3. Singapore to become AI hub

Singapore will invest more than SG$1 billion over the next five years into AI compute, talent and industry development. Part of the investment will be used to ensure that Singapore can secure access to advanced chips that are crucial to AI development and deployment.

4. Workforce Income Supplement scheme enhanced

In 2024, DPM Wong will raise the qualifying income cap from SG$2,500 to S$3,000. He will also raise Workforce payouts where lower-wage senior workers will qualify for a maximum annual payout of SG$4,900, up from SG$4,200 today.

In addition, the Local Qualifying Salary (LQS) for full-time workers will be raised from SG$1,400 to SG$1,600. The minimum hourly rate will be increased from $9 to $10.50 per hour.

5. Base Erosion and Profit Shifting (BEPs) 2.0 for MNEs

The Singapore government will make significant adjustments to the tax system to take into consideration the international BEPS 2.0 initiative.

MNE groups that are parented in Singapore will have to pay a minimum effective tax rate of 15% on their groups’ overseas profits, regardless of where they operate. This falls under the Income Inclusion Rule (IIR).

On top of that, the Domestic Top-up Tax (DTT) will be implemented. Without this tax, these MNE groups wouldhave had to pay their parent jurisdictions the effective tax rate of 15% on their Singapore profits.

Hence, the IIR and DTT will be applied to large MNE groups with global revenue of at least 750 million euros annually. This will take effect for businesses' financial years starting on or after 1 January 2025.

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