Singapore’s Budget 2025 introduced a series of tax incentives designed to support businesses, drive innovation, and strengthen the nation’s economic resilience. Here’s a breakdown of four key tax measures that companies should take note of:
1. Corporate Income Tax Rebate
To provide relief to businesses facing rising costs, the government has introduced a 50% Corporate Income Tax rebate for the Year of Assessment 2025. This measure aims to help companies manage operating expenses while staying competitive.
- The rebate will be capped at $40,000 per company.
- To ensure that even smaller businesses benefit, a minimum payout of $2,000 will be given to all active companies that employed at least one local worker in 2024.
2. Enhanced Support for Enterprise Innovation and R&D
Recognizing the importance of innovation in driving long-term economic growth, the government is enhancing support for businesses investing in research and development (R&D):
- A $3 billion top-up to the National Productivity Fund will provide additional resources to encourage high-value investments and innovation.
- A new Enterprise Compute Initiative will allocate $150 million to help businesses adopt advanced artificial intelligence (AI) solutions by providing access to AI tools, computing power, and consultancy services.
- Continued investment in R&D infrastructure, including a national semiconductor R&D fabrication facility and enhanced public bioscience research centers.
3. Incentives for Listings and Investments in Singapore
To strengthen Singapore’s attractiveness as a financial hub, new tax incentives will be introduced for companies choosing to list on the Singapore Exchange:
- Tax incentives for Singapore-based firms and fund managers to encourage local IPOs and economic activities.
- Incentives for fund managers that invest significantly in Singapore-listed equities, aimed at boosting capital market growth.
- The Private Credit Growth Fund will receive $1 billion to enhance financing options for high-growth local enterprises.
4. Support for Workforce Development and Business Transformation
To help businesses upgrade their workforce and adopt new business models, the government is streamlining and enhancing several existing grants:
- SkillsFuture Workforce Development Grant: This will consolidate multiple workforce transformation schemes and offer up to 70% funding support for job redesign activities.
- Redesigned SkillsFuture Enterprise Credit: Companies with at least three local employees will receive a fresh $10,000 credit to offset costs for workforce transformation initiatives and training programs.
- Increased Co-Funding for Wage Growth: The Progressive Wage Credit Scheme will see higher government co-funding levels, increasing from 30% to 40% in 2025, and from 15% to 20% in 2026.
Conclusion
The tax incentives and enterprise support measures outlined in Singapore’s Budget 2025 reflect the government’s commitment to fostering a competitive and resilient business environment. Companies are encouraged to leverage these incentives to drive innovation, enhance workforce capabilities, and position themselves for long-term growth.
For businesses looking to optimize these benefits, staying informed and engaging with relevant government agencies will be crucial in the coming months.
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At YYC, we believe in proactive care and positive experiences. For more information about Singapore Budget 2025, please reach out to us.