SINGAPORE: Like many in the food and beverage sector, Foreword Coffee has been feeling the heat from escalating business costs, particularly for manpower.
Co-founder Lim Wei Jie is glad that some relief is on the way, with the extension of the Enabling Employment Credit. In his Budget 2025 speech on Tuesday (Feb 18), Prime Minister Lawrence Wong said the scheme will be extended until the end of 2028.
The scheme provides wage support of up to 20 per cent for workers with disabilities earning below S$4,000 (US$2,980) a month, capped at S$400 for each employee.
The wage offsets, disbursed on a half-yearly basis, have been helpful for the social enterprise, which currently has 21 employees with disabilities or special needs.
“Extending the scheme will continue to support businesses that hire inclusively and hopefully, encourage more to do so,” said Mr Lim, who started Foreword Coffee in 2017 to tackle social stigma and empower marginalised groups.
Further relief comes from enhancements to the Progressive Wage Credit Scheme, which co-funds eligible wage increases for lower-wage workers as they upskill and improve work productivity.
The government will increase its co-funding level to 40 per cent this year, up from 30 per cent. Next year, this will be 20 per cent, up from 15 per cent.
This will enable Foreword Coffee to pay its staff more, although productivity gains may not be easy with the limited number of training courses for workers with disabilities, said Mr Lim.
"It's not as simple as bringing in new technology, but whether our workers are able to adapt to them,” he said. “At the moment, there are very limited courses for us to send them to, so it ends up (with) a lot of internal coaching on our own."
Several other measures to help businesses cope with rising costs were announced on Tuesday, as well as initiatives that target productivity growth and technological transformations in the long term.
Firms and business associations that CNA spoke to largely welcomed these measures, but they also raised concerns about how the effects may be limited in some instances.
It was announced that companies will get a 50 per cent corporate income tax rebate for another year. Eligible firms will also receive a cash grant of S$2,000, even if they are not profitable, provided they are active and employed at least one local worker in 2024.
The total benefit that a company can receive – combining the tax rebate and the grant – will be capped at S$40,000.
While the measures will help, the impact will vary across businesses, said Mr Ang Yuit, president of the Association of Small and Medium Enterprises (ASME).
The tax rebate and cash grant will generally benefit profitable businesses, he said. For those that are unprofitable, the significance of the cash grant, if they are eligible, will depend on the number of employees.
“If they are a one-man show, the cash grant will be a sizable support in terms of cost defrayment. But if I have more staff, a S$2,000 grant isn’t going to support me much in the overall scheme of things,” he said.
“Ironically, the last group of businesses is the one that needs the most financial support.”
Mr Ang noted there could have been “a bit more granularity” in how the tax rebate and cash grant are administered.
“If I am not making money and I have three staff and more, I can get more cash support but with a cap on the top end. I think this will ensure that help is given to the companies that are trying very hard to stay afloat and are most affected by rising costs,” he said.
It was also announced that the Central Provident Fund (CPF) contribution rates for senior workers will be raised by 1.5 percentage points in 2026.
This brings the CPF contribution rates for workers aged above 55 to 60 to 34 per cent. For workers aged above 60 to 65, their CPF contribution rates will go up to 25 per cent.
Employers will continue to get the CPF Transition Offset for another year to cover half the increase in employer contributions for 2026. The Senior Employment Credit - which provides wage offsets to employers that hire Singaporean workers aged 60 and above, and are earning less than S$4,000 a month - will also be extended to end-2026.
Mr Ang said the higher CPF contribution rates may affect businesses in certain sectors more, such as those in the F&B and retail industries which hire more senior workers. Unfortunately, these sectors are already facing a double whammy of rising costs and stiff competition.
The Singapore Manufacturing Federation (SMF) said businesses, particularly small and medium-sized enterprises, have shared concerns about the long-term impact on operating costs.
The Senior Employment Credit and CPF Transition Offset will be “short-term relief”, with companies eventually bearing “the full cost of higher contributions”, SMF president Lennon Tan told CNA.
“Currently, the lower CPF rates for senior workers make them more attractive hires, especially when coupled with their wealth of experience,” he added.
“With this incentive reduced, businesses may face challenges balancing increased labour costs, rising healthcare benefits expenses, and potential productivity gaps in certain roles.”
SMF said it hopes to work closely with the government to ensure that businesses can remain competitive while supporting older workers in building a secure retirement, such as through initiatives that help companies redesign roles for senior employees.
The Singapore National Employers Federation (SNEF) told CNA that while any increase in CPF contribution rates will directly impact business costs and bottom lines, the CPF Transition Offset should “provide much-needed financial relief” and help mitigate any impact.
“SNEF remains committed to working closely with the Government and our tripartite partners to ensure that policies effectively balance the retirement adequacy of senior workers with business sustainability,” said its CEO Hao Shuo.
Beyond immediate cost relief, the Budget statement also included measures targeted at raising productivity levels and promoting enterprise and workforce transformation for the long run.
The Singapore Business Federation described the new SkillsFuture Workforce Development Grant and enhanced SkillsFuture Enterprise Credit as “welcome moves to support a holistic approach to workforce and enterprise transformation”.
The former is a move to consolidate existing schemes administered by Workforce Singapore and SkillsFuture Singapore. Apart from simplifying the application process for companies, the new grant will provide up to 70 per cent funding support for job redesign activities.
Meanwhile, the SkillsFuture Enterprise Credit scheme, which helps employers defray out-of-pocket costs for enterprise and workforce transformation, will be revamped to work like “an online wallet”.
It will allow companies to check their credit balance and immediately offset eligible workforce transformation costs. Businesses with at least three resident employees will also get an additional S$10,000 in credits from the second half of 2026, valid for three years.
“We particularly welcome the shift from a reimbursement model to a wallet-based structure to address a key challenge faced by SMEs,” said SBF.
Echoing that, ASME's Mr Ang said the “online wallet” will allow businesses to tap on the credits easily, rather than waiting for reimbursements.
The fresh top-up to the SkillsFuture Enterprise Credit scheme will be an additional impetus for businesses to embark on continued workforce transformation.
“More importantly, this will help them to take training in their own hands. Only businesses will know what kind of training they need,” he said.
Others welcomed new initiatives, such as a new S$1 billion Private Credit Growth Fund to provide more financing options for high-growth local enterprises, alongside tax incentives for fund managers and Singapore-based companies to list in Singapore.
“These measures are designed to attract investments, invigorate our stock market, and generate positive ripple effects across Singapore's financial ecosystem,” said co-founder and CEO of local biotech firm Mirxes Zhou Lihan.
But KPMG Singapore's partner and head of tax Ajay Kumar Sanganeria said the corporate tax rebate for newly listed companies “mainly benefits profit-making firms”.
“To attract high-growth but pre-profitable companies, additional incentives could be explored, particularly those that offset substantial listing expenses such as regulatory, advisory, and compliance costs,” he said.
“It will also be beneficial to structure these tax schemes so that companies intending to list can tap on them in a fast-track process with expedited approvals, given the time-sensitive nature of listings.”
To help companies adopt artificial intelligence (AI) solutions, a new S$150 million Enterprise Compute Initiative was also announced.
Under this scheme, eligible firms will be partnered with major cloud service providers to access AI tools and computing power, as well as expert consultancy services.
SGTech, the trade association for Singapore’s tech industry with over 1,000 member companies, said: “AI can potentially transform businesses, but cost and complexity remain major barriers, especially for smaller enterprises.
“This initiative helps level the playing field by providing access to powerful AI tools and computing resources that might otherwise be out of reach.”
“By partnering with major cloud providers, businesses gain access to cutting-edge technology and expert guidance, increasing the likelihood of successful AI adoption,” its chairman Nicholas Lee added.
But there are areas for improvements, such as a “stronger integration” across different initiatives such as the SkillsFuture Level-Up Programme which provides training allowances for mid-career workers taking on full-time and part-time courses, and the SkillsFuture Workforce Development Grant.
Having a “centralised skills platform” could improve coordination and information-sharing, said Mr Lee.
Continue reading...
Co-founder Lim Wei Jie is glad that some relief is on the way, with the extension of the Enabling Employment Credit. In his Budget 2025 speech on Tuesday (Feb 18), Prime Minister Lawrence Wong said the scheme will be extended until the end of 2028.
The scheme provides wage support of up to 20 per cent for workers with disabilities earning below S$4,000 (US$2,980) a month, capped at S$400 for each employee.
The wage offsets, disbursed on a half-yearly basis, have been helpful for the social enterprise, which currently has 21 employees with disabilities or special needs.
“Extending the scheme will continue to support businesses that hire inclusively and hopefully, encourage more to do so,” said Mr Lim, who started Foreword Coffee in 2017 to tackle social stigma and empower marginalised groups.
Further relief comes from enhancements to the Progressive Wage Credit Scheme, which co-funds eligible wage increases for lower-wage workers as they upskill and improve work productivity.
The government will increase its co-funding level to 40 per cent this year, up from 30 per cent. Next year, this will be 20 per cent, up from 15 per cent.
This will enable Foreword Coffee to pay its staff more, although productivity gains may not be easy with the limited number of training courses for workers with disabilities, said Mr Lim.
"It's not as simple as bringing in new technology, but whether our workers are able to adapt to them,” he said. “At the moment, there are very limited courses for us to send them to, so it ends up (with) a lot of internal coaching on our own."
Several other measures to help businesses cope with rising costs were announced on Tuesday, as well as initiatives that target productivity growth and technological transformations in the long term.
Firms and business associations that CNA spoke to largely welcomed these measures, but they also raised concerns about how the effects may be limited in some instances.
CORPORATE INCOME TAX REBATE
It was announced that companies will get a 50 per cent corporate income tax rebate for another year. Eligible firms will also receive a cash grant of S$2,000, even if they are not profitable, provided they are active and employed at least one local worker in 2024.
The total benefit that a company can receive – combining the tax rebate and the grant – will be capped at S$40,000.
While the measures will help, the impact will vary across businesses, said Mr Ang Yuit, president of the Association of Small and Medium Enterprises (ASME).
The tax rebate and cash grant will generally benefit profitable businesses, he said. For those that are unprofitable, the significance of the cash grant, if they are eligible, will depend on the number of employees.
“If they are a one-man show, the cash grant will be a sizable support in terms of cost defrayment. But if I have more staff, a S$2,000 grant isn’t going to support me much in the overall scheme of things,” he said.
“Ironically, the last group of businesses is the one that needs the most financial support.”
Mr Ang noted there could have been “a bit more granularity” in how the tax rebate and cash grant are administered.
“If I am not making money and I have three staff and more, I can get more cash support but with a cap on the top end. I think this will ensure that help is given to the companies that are trying very hard to stay afloat and are most affected by rising costs,” he said.
Related:
RISE IN CPF CONTRIBUTION RATES FOR SENIOR WORKERS
It was also announced that the Central Provident Fund (CPF) contribution rates for senior workers will be raised by 1.5 percentage points in 2026.
This brings the CPF contribution rates for workers aged above 55 to 60 to 34 per cent. For workers aged above 60 to 65, their CPF contribution rates will go up to 25 per cent.
Employers will continue to get the CPF Transition Offset for another year to cover half the increase in employer contributions for 2026. The Senior Employment Credit - which provides wage offsets to employers that hire Singaporean workers aged 60 and above, and are earning less than S$4,000 a month - will also be extended to end-2026.
Mr Ang said the higher CPF contribution rates may affect businesses in certain sectors more, such as those in the F&B and retail industries which hire more senior workers. Unfortunately, these sectors are already facing a double whammy of rising costs and stiff competition.
The Singapore Manufacturing Federation (SMF) said businesses, particularly small and medium-sized enterprises, have shared concerns about the long-term impact on operating costs.
The Senior Employment Credit and CPF Transition Offset will be “short-term relief”, with companies eventually bearing “the full cost of higher contributions”, SMF president Lennon Tan told CNA.
“Currently, the lower CPF rates for senior workers make them more attractive hires, especially when coupled with their wealth of experience,” he added.
“With this incentive reduced, businesses may face challenges balancing increased labour costs, rising healthcare benefits expenses, and potential productivity gaps in certain roles.”
SMF said it hopes to work closely with the government to ensure that businesses can remain competitive while supporting older workers in building a secure retirement, such as through initiatives that help companies redesign roles for senior employees.
Related:
The Singapore National Employers Federation (SNEF) told CNA that while any increase in CPF contribution rates will directly impact business costs and bottom lines, the CPF Transition Offset should “provide much-needed financial relief” and help mitigate any impact.
“SNEF remains committed to working closely with the Government and our tripartite partners to ensure that policies effectively balance the retirement adequacy of senior workers with business sustainability,” said its CEO Hao Shuo.
MEASURES FOR THE LONG TERM
Beyond immediate cost relief, the Budget statement also included measures targeted at raising productivity levels and promoting enterprise and workforce transformation for the long run.
The Singapore Business Federation described the new SkillsFuture Workforce Development Grant and enhanced SkillsFuture Enterprise Credit as “welcome moves to support a holistic approach to workforce and enterprise transformation”.
The former is a move to consolidate existing schemes administered by Workforce Singapore and SkillsFuture Singapore. Apart from simplifying the application process for companies, the new grant will provide up to 70 per cent funding support for job redesign activities.
Meanwhile, the SkillsFuture Enterprise Credit scheme, which helps employers defray out-of-pocket costs for enterprise and workforce transformation, will be revamped to work like “an online wallet”.
It will allow companies to check their credit balance and immediately offset eligible workforce transformation costs. Businesses with at least three resident employees will also get an additional S$10,000 in credits from the second half of 2026, valid for three years.
“We particularly welcome the shift from a reimbursement model to a wallet-based structure to address a key challenge faced by SMEs,” said SBF.
Echoing that, ASME's Mr Ang said the “online wallet” will allow businesses to tap on the credits easily, rather than waiting for reimbursements.
The fresh top-up to the SkillsFuture Enterprise Credit scheme will be an additional impetus for businesses to embark on continued workforce transformation.
“More importantly, this will help them to take training in their own hands. Only businesses will know what kind of training they need,” he said.
Related:
Others welcomed new initiatives, such as a new S$1 billion Private Credit Growth Fund to provide more financing options for high-growth local enterprises, alongside tax incentives for fund managers and Singapore-based companies to list in Singapore.
“These measures are designed to attract investments, invigorate our stock market, and generate positive ripple effects across Singapore's financial ecosystem,” said co-founder and CEO of local biotech firm Mirxes Zhou Lihan.
But KPMG Singapore's partner and head of tax Ajay Kumar Sanganeria said the corporate tax rebate for newly listed companies “mainly benefits profit-making firms”.
“To attract high-growth but pre-profitable companies, additional incentives could be explored, particularly those that offset substantial listing expenses such as regulatory, advisory, and compliance costs,” he said.
“It will also be beneficial to structure these tax schemes so that companies intending to list can tap on them in a fast-track process with expedited approvals, given the time-sensitive nature of listings.”
To help companies adopt artificial intelligence (AI) solutions, a new S$150 million Enterprise Compute Initiative was also announced.
Under this scheme, eligible firms will be partnered with major cloud service providers to access AI tools and computing power, as well as expert consultancy services.
SGTech, the trade association for Singapore’s tech industry with over 1,000 member companies, said: “AI can potentially transform businesses, but cost and complexity remain major barriers, especially for smaller enterprises.
“This initiative helps level the playing field by providing access to powerful AI tools and computing resources that might otherwise be out of reach.”
“By partnering with major cloud providers, businesses gain access to cutting-edge technology and expert guidance, increasing the likelihood of successful AI adoption,” its chairman Nicholas Lee added.
But there are areas for improvements, such as a “stronger integration” across different initiatives such as the SkillsFuture Level-Up Programme which provides training allowances for mid-career workers taking on full-time and part-time courses, and the SkillsFuture Workforce Development Grant.
Having a “centralised skills platform” could improve coordination and information-sharing, said Mr Lee.
Continue reading...