WHAT YOU DIDN’T KNOW ABOUT SG BUDGET 2025: HOW IT MAY IMPACT YOUR BUSINESS GOALS AND PLANS

Here are the main Budget highlights:

Managing Businesses Costs

Immediate relief by reducing tax burden, especially for small and medium sized companies (SMEs), to retain earnings for reinvestment or operational needs:

• Maximum benefits for companies capped at $40,000:
  • 50% corporate income tax (CIT) rebate for the Year of Assessment (YA) 2025.
  • Minimum cash grants of $2,000 for active companies with at least one local employee in 2024.

Enhanced Progressive Wage Credit Scheme (PWCS)

To manage rising wage costs by ensuring sustainable income growth for lower-wage workers.  To raise co-funding levels to cover:

• 40% of wage increases in 2025.
• 20% of wage increases in 2026.

The Productivity Solutions Grant (PSG)

Good news! The PSG is still around and Singapore companies can improve their productivity and automate existing processes through IT solutions and equipment.

• Up to 50% of eligible costs for local SMEs

Receive up to $30,000 and improve your business productivity.

• Supports sector-specific and generic solutions

Get support for sector-specific and generic solutions that are pre-approved by EnterpriseSG and other participating agencies. 

CCP for SME Professionals Grant

Career Conversion Programmes (CCPs), initiated by Workforce Singapore, are designed to help mid-career new hires and existing employees reskill and transition into new roles with strong long-term prospects. The two key areas are in Place-and-Train for New Hires and in Job Re-design Reskilling for Existing Employees. 

• Standard Rate: Up to 70% of Monthly Salary
  (capped at $5,000 for funding per month during training period)
• Enhanced Rate: Up to 90% of Monthly Salary
  (capped at $7,500 for funding per month during training and retention period)

The salary support period comes up to 6 months. For more information, you may also refer to: https://www.waf.org.sg/grants 

Enhanced Technology and Innovation Engines

To maintain technology adoption and innovation:

• An extra $3 billion to go to the National Productivity Fund to improve cutting-edge sectors, including AI and quantum computing.
• An estimated $1 billion to strengthen the Research and Development (R&D) sector:
  • Significant upgrades are planned for the bio-science and med-tech research infrastructure.
  • Development of a new semi-conductor R&D fabrication facility.
• A new $150 million Enterprise Compute Initiative to leverage on AI will be introduced to reduce costs and barriers.

Strengthening Enterprise Ecosystem

New enhancement measures to assist companies scale and thrive in SG and overseas through organic growth or mergers and acquisitions (M&A).

• An upcoming Global Founders Programme (GFP) under the Economic Development Board (EDB).
• A new $1 billion Private Credit Growth Fund to broaden financing options.
• New tax incentive to support the development of Singapore’s equities market:

• Primary listings will receive a 20% CIT rebate.
• Secondary listings will receive a 10% rebate.
• Rebates will be capped at $6 million per YA for qualifying entities with a market capitalization of $1 billion or more or $3 million per YA for those below this threshold.

Tax deduction for equity-based remuneration schemes

A new tax deduction has been introduced for equity-based remuneration schemes. This measure incentivizes companies to offer share-based compensation, aligning employees’ interests with company performance and fostering a culture of ownership and long-term commitment.

Extension of the Double Tax Deduction for Internationalization Scheme

To promote overseas expansion, the Double Tax Deduction for Internationalization (DTDi) scheme has been extended. This allows businesses to claim tax deductions on eligible expenses incurred during international market expansion activities, reducing the financial barriers to entering new markets.

Investing in Infrastructure

New initiatives to help businesses transit to cleaner and greener practices while benefiting from a more resilient and efficient operating system.

• An additional $5 billion to the Changi Airport Development Fund to develop Terminal 5 which will double the airport’s capacity to more than 50%.
• To add $5 billion to the Future Energy Fund to secure clean power and to study nuclear development.

Singapore’s Budget 2025 presents significant opportunities for businesses to reduce costs, invest in workforce development, and adopt digital innovations. Companies should take full advantage of the corporate income tax rebate, new tax deductions, and funding support for job redesign. By leveraging these initiatives, companies can enhance resilience, drive innovation, and position themselves for sustainable growth in 2025 and beyond.

Speak to us to help you better navigate your business needs amidst the new Budget 2025 measures.