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Singapore Budget 2025-26 Highlights: Tax Rebates, Wage Support, and New Enterprise Initiatives?

On 18 February 2025, Prime Minister and Finance Minister Lawrence Wong presented Singapore’s Budget for the 2025 Financial Year, outlining measures to support businesses and enterprises, while also addressing global economic challenges and providing assistance to Singaporeans.

Here’s a summary of the key measures and initiatives for businesses:

1. 50% Corporate Income Tax (CIT) Rebate.Rising prices are impacting Singaporean businesses, with many facing challenges due to higher rent and labor costs. To support them, a 50% Corporate Income Tax (CIT) rebate will be provided for the Year of Assessment 2025. Not all companies are profitable, and some may not benefit from this rebate. Therefore, every active company that employed at least one local worker in 2024 will receive a minimum benefit of SGD 2,000. The rebate for each company will be capped at SGD 40,000.
2. Progressive Wage Credit Scheme (PWCS). Many businesses remain committed to uplifting wages for lower-wage workers, despite the rising cost of living in Singapore. To support this, the PWCS will be enhanced. In 2025, the government will cover 40% of wage increases for lower-wage workers, up from 30% previously. In 2026, this support will be reduced to 20%, up from the previous 15%. This scheme aims to help businesses manage wage increases while supporting workers.
3. New Global Founder Programme. Some ventures are started by global companies, or by experienced entrepreneurs. The Singapore Economic Development Board (EDB) will launch a global founder program later this year to encourage global founders to anchor their ventures in Singapore.
4. Tax incentives for Singapore-based companies and fund managers. Tax incentives will be introduced for Singapore-based companies and fund managers that choose to list in Singapore and expand their operations there. Additionally, a tax incentive will be offered to fund managers who make significant investments in Singapore-listed equities, aiming to boost investment in Singapore’s capital markets.
5. New Enterprise Commute Initiative.The adoption of off-the-shelf AI solutions and digital marketing will continue to be supported by several initiatives, such as the Productivity Solutions Grant and SMEs Go Digital. Some companies may need a more tailored system and up to up to $150 million will be set aside for a new Enterprise Compute Initiative. Eligible companies will be partnered with major cloud service providers to access AI tools, computing power, and expert consultancy services.

SOURCE: Orbis