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SOURCE: Asiabiz Services Pte Ltd
The measures may push certain industries to move up the productivity ladder, or push them out of Singapore, says Asiabiz Services, a company formation consultancy.
Singapore (PRWEB) March 04, 2013
Early last week, the Ministry of Manpower (MOM) has announced that the monthly foreign worker levies (FWL) for five industry sectors will be increased by an average of S$50 to S$160 per worker and annually, with effect from 1 July 2014. Singapore company formation consultancy Asiabiz Services recognises that the punitive measures aim to push firms in the construction, services, process, manufacturing and marine sectors up the productivity ladder. It may also push them out of Singapore.
To offset the pain, the government has also announced that it will hold out the Jobs Flexibility Scheme for Productivity to the services sector with effect from 1 July 2013. The scheme, which was introduced for the hotel industry in 2012, gives firms the green light to assign Work Permit holders to more roles. This, in turn, may help them command higher wages.
According to MOM, industries that hire the most foreign workers and show the lowest productivity returns face the highest spectrum of levies over the coming two years. The construction sector, for example, see the FWL rise to S$750 on 1 July 2013, to S$950 on 1 July 2014, and to S$1,050 on 1 July 2015 per Work Permit holder.
The services sector will see a lower rise i.e. S$90 per work permit holder. This translates to an FWL of S$700 in 2014 and up to S$800 in 2015 per Work Permit holder. On top of that, the services sector will be subject to lower Dependency Ratio Ceilings come 1 July 2013.
Like the services sector, S Pass holders from all sectors will also be charged an FWL of S$90 per Work Permit holder per month. By July 2015, the FWL for this sector will range between S$330 and S$650.
The lowest increase i.e. S$50, was afforded to the manufacturing sector. By July 2015, the FWL will range between S$250 and S$700 per Work Permit holder.
Analysis by Asiabiz Services shows that new players in these sectors may be less inclined to opt for Singapore company setup.
Commenting on the measures, Mr. James Nuben, Head of Taxation at Asiabiz Services, said, “Although the move seeks to compel industries to limit their reliance on basic-skilled workers, it would inevitably be painful for companies in the near term. Firms have been clamouring for assistance and those that cannot cope with these impending levies or DRCs may find themselves reflecting if it may be better to place themselves overseas or doing things differently. The Jobs Flexibility Scheme, on the other hand, seems like a good idea. However, we hope that as more employees find themselves taking on more functions, they will be able to negotiate better salaries as well.”
ABOUT ASIABIZ SERVICES
Asiabiz Services is a Singapore-based consultancy that offers business solutions for both local and foreign professionals, investors and entrepreneurs. Our areas of expertise include Singapore company registration, offshore company setup, accounting, taxation and other related corporate services. Asiabiz Services also provides Singapore work visa and immigration services for foreign professionals wishing to relocate to Singapore.
120 Telok Ayer Street, Singapore 068589
Phone: +65 6303 4614
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