To help businesses cushion the economic impact of the COVID-19 outbreak, the “Stabilisation and Support Package” was announced in the Budget Statement for the financial year 2020. As the name suggests, the relief package seeks to stabilise the economy and support industries in this period of economic uncertainty. There are industry-specific and broad-based measures to support employers retain their employees and help businesses cope with cash flow difficulties precipitated by the COVID-19 outbreak.
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Automatic Extension of Interest-Free Instalments for Payment of CIT on ECI |
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Measures Introduced in Budget 2020 |
Impact |
Action Required |
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Companies that file their ECI from 19 February 2020 to 31 December 2020 and companies that have filed their ECI before 19 February 2020 and have ongoing instalment payments to be made in March 2020, will be automatically granted an additional two months of interest-free instalments.
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Companies will be able to stretch the payment of their estimated corporate income tax on ECI by an additional two months. With the additional instalments, the amount of corporate income tax payable in each instalment will be reduced and thus ease the cash flow of companies. |
Only companies that are on General Interbank Recurring Order (“GIRO”) are allowed to pay their taxes in instalments. Companies that do not have an existing GIRO arrangement should apply for GIRO to take advantage of the interest-free instalments scheme for payment of corporate income tax on ECI. Companies seeking to take advantage of the additional two months of interest-free instalments should also look into the filing of the ECI as early as possible after the financial year end to be entitled for maximum interest-free instalments. |
For further information on this measure, watch our Singapore Budget 2020 Insights video:
