Tuesday, June 28, 2022

IRs to get tax break for 2020, but higher entry levy stays

Singapore’s government has granted tax breaks and other incentives to the industry to help offset the impact of the Covid-19 virus on travel, though has chosen not to reduce its entry levy for locals. 

The government said the two integrated resorts will receive a tax rebate this year of 10 percent, while a property tax rebate of 30 percent will be granted for the accommodation and function room components of licensed hotels and serviced apartments, as well as MICE venues.

International cruise and regional ferry terminals will receive a 15 percent property tax rebate, while a temporary bridging loan programme will be introduced for a year to help businesses in the tourism sector with their operating costs and cash flow.

The government will also defer a planned hike in its general sales tax to 9 percent from 7 percent by about a year. 

The measures were announced in the island state’s annual budget address in February and formed part of a $4 billion package designed to help stabilize the economy in the wake of the outbreak. Tourism arrivals are expected to be down by about 20 percent to 30 percent this year, with the high-spending China visitor likely to be worst affected.

The Singapore Tourism Board has also said it will waive licence fees for hotels, travel agents and tourist guides, and defray enhanced cleaning costs for hotels that provided accommodation to confirmed and suspected cases of Covid-19 infections.

MayBank Investment Bank estimates the reduction in property tax will save Genting about S$3.8 million for 2020.    

“This constitutes only 70bps of our FY20 core net profit forecast of $539.1 million,” Associate Director Samuel Yin Shao Yang wrote in a note. “We were hoping that the 50 percent casino entry levy hike of 4 Apr 2019 would be rolled back a tad.”


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