Singapore offers foreign worker levy rebate to companies facing labour shortage

Around 15,000 foreign companies in Singapore facing labour shortage due to the government’s decision to stop the arrival of workers from India and Bangladesh will be given a hike in foreign workers levy rebates from May to December, Ministry of Manpower (MOM) announced on Saturday.

Singapore has halted the arrival of passengers from India and Bangladesh considering the massive spike in the number of cases of coronavirus.

As per the new decision taken by the Singapore government the companies that would get the advantage of increase in foreign workers levy rebate are from the sectors of construction, marine shipyard and process (CMP) sectors.

“Around 15,000 companies in the construction, marine shipyard and process (CMP) sectors, facing labour shortage due to Singapore's stopping arrival of workers from India and Bangladesh, will see an increase in foreign worker levy rebates from May to December,” the ministry said in a statement.

The rebate for each work permit holder in the CMP sectors will go up from 90 Singapore dollars per month to 250 Singapore dollars per month.

The original rebate of 90 Singapore dollars per work permit holder in the CMP sectors has been in place since August last year.

Since last June, 920 million Singapore dollars has been set aside to extend foreign worker levy rebates for the 15,000 companies or so in the construction, marine shipyard, process sectors, according to media reports.

"The tighter border restrictions and stricter Safe Management Measures due to Covid-19 have resulted in significant manpower shortages and increased costs for the CMP sectors," said the Ministry, adding that the number of work permit holders in these sectors fell by nearly 60,000, or 16 per cent, last year.

The first round of the increased rebate in May will be paid out in June.

"Employers can consider making use of the FWL (foreign worker levy) rebate to retain existing workers and bring in Work Permit Holders from lower-risk countries or regions," said the Ministry in the statement.

A decision will be made closer to the end of the year if this rebate would be extended beyond December.

"The CMP sectors play an essential role in Singapore's development, and Government agencies are working closely with the CMP sectors through the Industry Transformation Maps to transform their businesses and reduce manpower reliance to become more resilient to future shocks," it.

"However, these efforts will take time to bear fruit. In the immediate term, the increased costs continue to weigh heavily on these firms."

On Friday, the ministry said new entry applications for work pass holders from higher-risk countries and regions would no longer be accepted with immediate effect.

However, the new restriction excludes workers needed for key strategic projects and infrastructural works.

Higher-risk countries and regions refer to all places except Australia, Brunei, mainland China, New Zealand, Taiwan, Hong Kong and Macau.

Singapore has stopped entry for all long-term pass holders, short-term visitors with recent travel history to India, which is battling a Covid-19 crisis.

That entry ban, which began on April 24, was expanded to include visitors with recent travel history to Bangladesh, Nepal, Pakistan and Sri Lanka, according to media reports.