Budget 2025: Retailers call for foreign worker levy cuts
An increase in the dependency ratio ceiling (DRC) and reduced foreign worker levies are among the measures that Budget 2025 could adopt to help Singapore retailers manage rising costs and a tight labour market, the Singapore Retailers Association (SRA) said.
In its Budget 2025 recommendations released on Jan 23, SRA proposed easing the DRC to “facilitate the employment of more foreign workers” to fill front-line retail roles.
The DRC sets the maximum share of S Pass and work permit holders in a company. The current DRC of 35 per cent for the services sector creates “significant challenges” for manpower resourcing, SRA noted.
“Given the nature of front-line retail employment – including shift and weekend work, extended periods of standing, and the ongoing demands of customer service – retail is generally not considered a career of choice for local workers,” it said.
The association recommended reducing the foreign worker levy by 20 per cent to 30 per cent for service workers with at least the Workforce Skills Qualifications certificate in retail operations.
“This would help to upskill the retail workforce for the next leap of growth in the retail sector as we continue to digitalise and transform the sector,” it added.
Manpower flexibility
Other manpower-related suggestions included expanding the Non-Traditional Sources Occupation List, which allows businesses to hire work permit holders from specified additional countries for certain roles, such as cooks in Indian restaurants.
For the retail sector, SRA proposed widening the list of source countries to include those with a “service-oriented culture”, such as the Philippines or Vietnam.
To ensure the retail workforce remains “highly skilled and productive”, this expansion should be tied to retailers’ adherence to the Progressive Wage Model and participation in the Career Conversion Programme for job redesign and reskilling, the association noted.
It called for broadening the Part-Time Re-employment Grant to support flexible work arrangements such as flexi-hours, staggered hours or remote work to attract stay-at-home mothers and caregivers.
The Career Conversion Programme could be extended to include part-time workers to provide a “more structured framework” for the transition. This would encourage employers to hire individuals with career breaks, thereby expanding the manpower pool, it added.
Upskilling and cost efficiency
To support workforce and business transformation, SRA urged an extension and top-up of the SkillsFuture Enterprise Credit (SFEC), which provides employers with a one-off $10,000 sum for such efforts.
While the SFEC usage deadline was extended in Budget 2024 to Jun 30, 2025, further extensions and additional credits would incentivise businesses to continue upgrading their workforce and operations, SRA said.
The credits could fund “competency building” initiatives, such as overseas learning missions and programmes on emerging topics like sustainability, it suggested.
It proposed relaxing the 60/40 rule for industrial properties – where 60 per cent of gross floor area is reserved for industrial purposes and 40 per cent for ancillary uses – to support the relocation of “large-format retail” to less densely populated industrial zones.
“This adjustment would also promote more effective use of downtown retail spaces,” it said.
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