A key lesson we can draw from the challenges of the COVID-19 pandemic is that we as a nation and an economy must be agile and quick to adapt to rapidly changing and unforeseen circumstances. Now is the time to Re-plan and rebuild our workforce and community so that Singapore as a whole can emerge stronger, fully prepared to face and overcome any challenges with confidence as we surge ahead to strengthen our place on the world-class stage.

Workforce Rebuilding Measures

Building skilled human capital and talent

To step up industry innovation and transformation, a balance must be found to enhance the complementarity of local and foreign manpower, especially in new growth areas. The following schemes have therefore been extended:

The WCS supports companies to retain or attract local talent. The co-funding level of 15% and the qualifying gross wage ceiling at S$5,000 remains unchanged.

The CTP supports companies that employ foreign specialists with the right expertise not found in Singapore. They can contribute to building local capabilities through training our local workforce.

Our view

By transferring capabilities, we can reduce our dependency on foreign specialists

The WCS was introduced to support businesses in their transformation efforts and encourage sharing of productivity gains with Singaporean workers with the Government co-funding the wage increases. In view of the continued pressing need to rely less on foreign workers, the scheme which was scheduled to be phased out, is now extended by one year.

To support the foreign-to-local skills transfer, funding support for the CTP includes the following:

  1. Attachment-related costs and salary support for foreign and local specialists and Singaporean trainees on overseas attachments to acquire new capabilities

  2. Equipment cost and venue cost for certain industry-wide projects

Companies that meet the CTP criteria will be reimbursed for qualifying expenses incurred.

Reducing the Sub-Dependency Ratio Ceiling (sub-DRC) for S Pass holders in Manufacturing

The sub-DRC refers to the quota of S Pass holders (mid-level skilled staff) to local workers.

The change puts the manufacturing sector more in line with the tightening implemented in other sectors, namely: services, construction, marine shipyard, and process.

Currently, the S Pass sub-DRC for the services sector is at 10% while construction, marine shipyard, and process are at 18% (to decrease to 15% from 1 January 2023).

Our view

Supporting growth, reducing dependency on foreign workers in manufacturing

The change is in line with the Government’s direction of continuing to review the S Pass framework to achieve a calibrated balance between local and foreign employees. As indicated in the Budget speech, S Pass qualifying salaries and worker levies will also continue to be reviewed to achieve this desired balance. 

The announcement comes shortly after the Government has announced plans to grow the manufacturing sector by 50% over the next ten years transforming Singapore into an advanced manufacturing hub. 

An advanced manufacturing hub needs to consider the use of robotics and other advanced technologies that will rely less on human labour, which can then support lower reliance on foreign workers. Employers in the manufacturing sector are encouraged to strengthen and upskill their local core workforce and moderate reliance on S Pass holders within the two-year implementation period.

Community Strengthening Measures

Extension of 250% tax deduction for qualifying donations

The 250% tax deduction on qualifying donations made to Institutions of a Public Character (IPCs), was originally scheduled to lapse on 31 December 2021. This is now extended to 31 December 2023.

All other conditions for the tax deduction remain the same.

Our view

Businesses can do more to help the community

Many charities have experienced a dip in their income streams as a result of COVID-19 and need to utilise their reserves to keep operations going. This has in turn impacted those in our community that need help.

The extension demonstrates the Government's acknowledgement of the importance of our social fabric and commitment to encourage charitable giving and support the IPCs' work despite the current economic climate. 









Extension of Not-for-Profit Organisation (NPO) tax incentive

The NPO tax incentive, which is scheduled to lapse on 31 March 2022, has been extended till 31 December 2027. 

Our view

Enhancing Singapore’s status as a philanthropic hub

The extension of the NPO tax incentive, which provides upfront certainty on non-taxation, will be a welcome move by NPOs. 

The extension signifies the Government's commitment to promote Singapore as a philanthropic hub and to attract NPOs to Singapore.








Extension of the Business and IPC Partnership Scheme (BIPS)

Under BIPS, qualifying persons are eligible for a 250% tax deduction on qualifying expenditure, suchs as wages incurred in respect of services providd by qualifying employees to an IPC or the secondment of qualifying employees o an IPC, subject to conditions being met.

BIPS was originally due to lapse on 31 December 2021.

Our view

Donations are not the only way to give back

BIPS is a scheme that encourages corporate volunteerism to give back to the community with skill sets and talents, and not just philanthropy through donations. 

The extension of BIPS will help support the community's diverse needs and strengthen the social compact so that we can emerge stronger as a community.