singapore not to withdra foreign worker levy
People pass the skyline of the central business district in Singapore January 4, 2016 Reuters

Singapore has said the foreign worker levy in the country will not be scrapped.

"We believe that foreign worker levies still play a part and indeed foreign worker levies will continue to be there and the policy will not change," Minister of State for Manpower Teo Ser Luck said.

He was responding to a raft of recommendations for 2016 budgets made by the small and medium business segments.

The Singapore Business Federation (SBF) lauded the government's decision in last year's budget to defer the planned increases to the foreign worker levy by one year.

"Here, we are suggesting to defer the increases further and conduct a review to reduce the levy quantum, taking into consideration the latest inflow of foreign workers," Leow said.

The body also asked the government to remove the levy for higher-skilled S Pass holders.

However, the minister confirmed the foreign worker levy will stay put. "I don't want to raise expectations because the manpower policy we implemented is ongoing and there's a lot of refinement along the way, so we have to look at the situation," he said.

"Nevertheless, we know the situation this year. The economic climate is very challenging for SMEs and we want to see what are the ways we can help them. This is something we are monitoring now," he added, according to the Channel News Asia.

At a conference on Monday, small and medium-sized enterprises (SMEs) called on the government to offer more support ahead of the budget in March.

It also urged the government to give more financing and infrastructure support to small firms so that they can tide over cost constraints.