7 in 10 Singaporean workers to benefit from wage credit scheme: MoF

It'll cost $3.6b over 3 years.

According to REACH, the Singapore economy is undergoing restructuring for quality growth, i.e. growth driven by sustained productivity improvement rather than manpower growth. 

The WCS is part of the government's 3-year transition support package for workers.

The Government will co-fund 40% of wage increases for Singaporean employees earning up to a gross monthly wage of $4,000, over the next three years.

This is to provide support for businesses to raise their employees’ wages and incentivise them to share productivity gains with their employees. The Wage Credits, which will be automatically paid out to employers annually, will cost the Government about $3.6 billion over three years.

Businesses that invest a minimum of $5,000 per Year of Assessment (YA) in the Productivity and Innovation Credit (PIC) qualifying expenditure, will receive a dollar-for-dollar matching cash bonus.

The bonus will be up to $15,000 over the Years of Assessment, YA2013 to YA2015, and is paid over and above existing PIC benefits. The PIC Bonus is expected to cost $450 million over three years.

A special Corporate Income Tax rebate, which is 30% of tax payable up to $30,000 per Year of Assessment, will be provided from YA 2013 TO YA 2015. This is expected to cost $1.3 billion over three years.

Additional support in the form of costs savings will also be provided for owners of commercial vehicles. Owners who choose to renew their Certificates of Entitlement (COEs) for five years in the first instance will now be allowed to extend their COEs further for another five years.

A one-year 30% road tax rebate of goods vehicles, buses and taxis will also be granted and the rebate will take effect on 1 July 2013.