Singapore budget 2025: Wong backs business with new initiatives

The theme of Singapore’s budget 2025, “Onward Together for a Better Tomorrow”, reflects Prime Minister Lawrence Wong’s commitment to ensuring that the announced measures benefit all Singaporeans.

To drive the economy forward, the budget focuses on three key pillars:

• Technology and innovation: strengthening Singapore’s position as a global tech and research and development (R&D) hub.
• Enterprise ecosystem: supporting businesses with funding, productivity initiatives and talent development.
• Infrastructure investments: ensuring sustainable urban growth while navigating resource constraints.

Six key themes of budget 2025

The budget is structured around six major themes that address both immediate economic concerns and long-term national goals:

1. Tackling cost pressures
2. Advancing Singapore’s growth frontier
3. Equipping workers throughout life
4. Building a sustainable city
5. Nurturing a caring and inclusive society
6. Rallying as one united people.

The economic numbers

Singapore’s economic report card for the past year has been largely positive:

• The economy expanded by 4.4 per cent, inflation eased and wage increases outpaced rising costs.
• After government transfers, income inequality has fallen to its lowest level since 2000, and the government collected S$30.9 billion in corporate income tax in 2024 – 10.2 per cent higher than estimated.
• FY2025 is expected to close with a S$6.8 billion surplus (0.9 per cent of GDP), demonstrating Singapore’s financial resilience.
• Government revenue for 2025 is forecast at S$122.8 billion, up 5.3 per cent (S$6.2 billion) from last year’s revised estimates.

“Corporate income tax is now the single largest contributor to total revenue, even surpassing net investment returns,” noted Wong. 

He emphasised that Singapore would adjust its policies in response to global tax developments.

And for the first time, the prime minister has explicitly stated that Singapore will explore nuclear energy as a long-term solution for clean, sustainable power. 

This marks a significant shift in Singapore’s energy strategy and its commitment to reducing carbon emissions while ensuring economic growth.

A raft of measures was announced to support Singaporean business. 

For example, to help firms tailor AI solutions to their needs and integrate them into their business processes and systems, up to S$150 million will be put aside for a new Enterprise Compute Initiative.

“Under this initiative, eligible enterprises will be partnered with major cloud-service providers to access AI tools and computing power, as well as expert consultancy services,” said Wong. 

“This will help enterprises leverage AI more effectively in their transformation journey.”

This new program aligns with CPA Australia’s Pre-Budget submission to Singapore’s government, which advocated for targeted incentives to support SMEs investing in AI infrastructure and employee upskilling.

Singapore already offers a world-class suite of well-designed and well-funded digital support programs for SMEs. 

This initiative builds upon that strong foundation, providing smaller businesses with better access to AI that can enhance their efficiency, productivity and decision making. 

Additionally, there will be a 50 per cent corporate income tax rebate for 2025, capped at S$40,000.

Non-profitable companies won’t miss out. Every active company that employed at least one local employee last year will be provided with a minimum benefit of S$2000, capped at S$40,000 per company.

A new S$1 billion Private Credit Growth Fund will also be introduced to provide more financing options for high-growth local enterprises.

CPA Australia’s Asia-Pacific Small Business Survey shows that some Singaporean small businesses face difficulty accessing finance, which can limit their potential and long-term viability. 

This new financing option should help alleviate some of those difficulties for businesses with good prospects.

Other business announcements include:

• To support the uplift of wages of lower income earners, the government will increase its co-funding levels for the Progressive Wage Credit Scheme from 30 per cent to 40 per cent in 2025, and from 15 per cent to 20 per cent in 2026.
• Τo encourage new listings in Singapore and increase demand for Singapore-listed equities, the government is proposing incentives including a Listing Corporate Income Tax Rebate of 20 per cent for primary listings in Singapore and 10 per cent for secondary listings. The rebate is subject to a cap of S$6 million per Year of Assessment for qualifying entities, with market capitalisation of at least S$1 billion and S$3 million for qualifying entities with market capitalisation of less than S$1 billion. Newly listed fund managers will benefit from enhancements to the Financial Sector Incentive Fund Management through an enhanced concessionary tax rate (CTR). Fund managers or their holding companies that achieve a primary listing on the SGX and remain listed for five years will receive a 5 per cent CTR on their qualifying income until 31 December 2028. Fund managers must meet minimum requirements for professional headcount and assets under management.
• The extension of several business support schemes, including the S$100,000 enhanced cap for the Market Readiness Assistance Grant (it will now expire on 31 March 2026), the Double Tax Deduction for Internationalisation Scheme (it will now expire on 31 December 2030), and the tax benefits under the Mergers and Acquisitions Allowance. It will now expire 31 December 2030).
• This year, hawkers can look forward to one-time rental support of S$600 per stall for those in centres managed by government and government-appointed operators. 

Technology and innovation

• The National Productivity Fund (NPF) will be topped up with an additional S$3 billion as part of budget. The fund was set up in 2010 to support measures for businesses to improve productivity and continue to educate and train workers. 
• The public biosciences and medtech research infrastructure in the greater one-north area will be refreshed.
• A new national semiconductor R&D fabrication facility will also be developed. These two developments will cost about S$1 billion. 

Skills development

• From early next year, the training allowance under the SkillsFuture Level-Up Program – targeted at Singaporeans aged 40 and above – will be extended to part-time training. These workers can access a fixed allowance of S$300 a month to support their learning expenses.
• All companies with at least three resident employees will get a fresh S$10,000 in the redesigned SkillsFuture Enterprise Credit.
• The Senior Employment Credit (SEC) will be extended by one year, to the end of 2026. This will provide wage offsets for employers who hire Singaporean seniors aged 60 and above and earning less than S$4000 monthly. The Government will reimburse companies up to 7 per cent of the wages that they pay to workers aged 69 and above. 

The Future Energy Fund will see a S$5 billion top-up. The fund was set-up last year to support infrastructure investments for Singapore’s energy transition towards a net-zero future. 

Examples of energy transition infrastructure that could be supported by the fund include undersea cables to import low-carbon electricity as well as new hydrogen terminals and pipelines – should Singapore decide to adopt and scale-up the use of hydrogen.

Household support

• Another S$800 in Community Development Council (CDC) vouchers for every Singaporean household, up from S$600 in 2024. Half can be used at supermarkets, the other half at merchants and hawker stalls. 
• All Singaporeans aged 21 to 59 will receive SG60 vouchers worth S$600, which can be used at all businesses that accept CDC vouchers.
• Eligible Housing and Development Board (HDB) households will get up to S$760 in utilities rebates this financial year – double the amount of regular U-Save rebates.
• S$500 LifeSG credits for each Singaporean child aged 12 and below. The credits can be used for groceries, utilities and pharmacy items.
• Every Singaporean aged 13 to 20 will receive a S$500 top-up to their Edusave or Post-Secondary Education Account this year.
• Monthly full-day childcare fee caps in government-supported preschools will be reduced. Fee caps at anchor and partner operators will be reduced by S$30 to S$610 and S$650 (per month respectively).
• There will be a S$5000 increase in the Child Development Account (CDA) First Step Grant, which will apply to each third and subsequent child born from 18 February 2025.
• There will be a personal income tax rebate of 60 per cent for Year of Assessment 2025. This will be capped at S$200.

Reactions to Singapore budget 2025

Greg Unsworth FCPA, Singapore divisional president, CPA Australia and digital business and risk services leader, PwC Singapore

“PM Lawrence Wong has announced a budget for the future and one in which ‘no-one is left behind’. This budget supports significant investment in AI development and innovation programs to ensure our economy is resilient and future-ready. At the same time, it is a budget that is supporting our communities and businesses in today’s real-world challenges through cash vouchers, tax rebates and a range of other targeted incentives and concessions.” 

Joshua Ong FCPA, Singapore divisional deputy president, CPA Australia and managing partner, Baker Tilly  

“With greater uncertainties in the new global contest, the S$4 billion for research and development to top up the National Productivity Fund and improve the research and development infrastructure aims to help Singapore maintain its competitive edge. Together with several measures to help businesses and individuals with rising costs and skill upgrading, businesses can continue to improve productivity, innovate and train workers to stay competitive in an intensifying global economic competition.”   

Selena Ling, chief economist, OCBC Group 

“Budget 2025 struck a good balance between addressing immediate cost-of-living concerns and positioning Singapore for the next lap of growth. The SG60 incentives will be welcomed by all Singaporeans, but there was also something for corporates, workers, families (especially large families), seniors and those with disabilities. The fiscal position remains strong with surpluses seen in FY2024 and also anticipated for FY2025.”