On 18 February 2025, Singapore’s Prime Minister and Minister for Finance, Mr. Lawrence Wong, delivered the Budget Statement for FY2025. The Budget introduces a range of measures aimed at supporting businesses, encouraging investment, and strengthening Singapore’s competitiveness. Below, we outline key updates that may impact companies and investors.
To help companies manage rising costs, the government will introduce a 50% corporate income tax rebate for the Year of Assessment (YA) 2025. Businesses that employed at least one local employee in the previous year will receive a minimum benefit of S$2,000, with a cap of S$40,000 per company. This initiative aims to ease cash flow constraints for businesses adjusting to structural cost increases.
As part of its commitment to uplifting lower-wage workers, the government will enhance the Progressive Wage Credit Scheme (PWCS). Co-funding levels for wage increases will rise from 30% to 40% in 2025 and from 15% to 20% in 2026. This move is designed to support businesses in meeting wage requirements while ensuring fair pay for lower-wage employees.
To drive long-term economic growth, the government will top up the National Productivity Fund (NPF) by S$3 billion. These funds will be used to enhance Singapore’s competitive strengths and support high-value industries. This is in line with Singapore’s consistent investment in research and development (R&D), which has accounted for approximately 1% of the nation’s GDP annually over the past 20 years.
Recognising the importance of deep-tech industries, the government will invest S$1 billion in research infrastructure for the biotech and semiconductor sectors. A major initiative within this investment is the establishment of a national semiconductor R&D fabrication facility, aimed at helping researchers and industry players prototype new innovations.
To strengthen Singapore’s position as a global financial hub, the Budget introduces new tax incentives to attract Singapore-based companies and fund managers to list in Singapore and grow their economic activities in Singapore. These include:
The measures announced in Budget 2025 present valuable opportunities for companies operating in Singapore. The corporate tax rebates and wage support initiatives provide financial relief for businesses navigating rising costs, while the investment in R&D and tax incentives for listings reinforce Singapore’s commitment to fostering innovation and attracting capital. Companies in the biotech, semiconductor, and financial services sectors, in particular, stand to benefit from the increased funding and policy support.
At Alpadis, we understand the evolving regulatory landscape and can help businesses navigate these changes to optimise tax benefits and compliance. If you have any questions about how Budget 2025 affects your company, feel free to reach out to our team.
