The Singapore Government has set aside an additional S$320mn to further extend the foreign worker levy (FWL) rebates to support firms in the construction, marine shipyard and process sectors. This is over and above the existing S$1.36bn Construction Support Package announced on 27 June 2020.
According to a press release by the Ministry of Manpower (MOM), the FWL waiver will also be extended to help ensure these sectors retain enterprise capabilities to emerge stronger from the COVID-19 crisis.
The government will increase our support to firms in these sectors by:
#1 FWL waiver extended till December 2020, will slowly be tapered down
There will be a further FWL waiver for levies due in July 2020, to bring the waiver to 100%.
Employers who have paid the 50% levies originally due in July will have the amount refunded to them. MOM will also provide a full FWL waiver for levies due in August and September 2020.
Currently, as part of the Fortitude Budget, all firms in the Construction, Marine Shipyard and Process sectors received a 100% FWL waiver for levies due in June and a 50% FWL waiver for levies due in July 2020.
From October to December 2020, the FWL waiver support will be tapered down. It will be stepped down to 75% for levies due in October, followed by 50% FWL waiver for levies due in November, and 25% FWL waiver for levies due in December 2020. The gradual reduction of the FWL waiver will give firms more time to adjust and raise the tempo of activities and operate at higher efficiency.
#2 S$375 FWL rebate extended to October 2020
On top of the waiver, firms in the construction, marine shipyard and process sectors will also receive a S$750 FWL rebate per S Pass and Work Permit holder for June, and a S$375 FWL rebate per S Pass and Work Permit holder for July as part of the Fortitude Budget. The $375 FWL rebate will be extended for another two months, to August and September 2020.
The $375 FWL rebate will replace the existing $90 FWL rebate for each Work Permit holder, announced by the government on 27 June 2020 to help firms adjust to more stringent safe management measures for the months of August and September 2020. Firms in the construction, marine shipyard and process sectors will continue to receive a $90 FWL rebate monthly for October 2020 until December 2021.
This move comes on the back of feedback from the Singapore Contractors Association Limited (SCAL), Association of Singapore Marine Industries (ASMI), and the Association of Process Industry (ASPRI) that the majority of an estimated 15,000 firms in the Construction, Marine Shipyard and Process sectors continue to face financial difficulties as they are unable to resume work due to COVID-19 measures.
It is estimated that the situation will persist until the foreign worker dormitories are fully cleared in August 2020 and their workers are progressively allowed to resume work thereafter.