Singapore’s Budget 2025 was delivered in Parliament on 18 February 2025 by Prime Minister and Finance Minister Lawrence Wong, in the year of Singapore’s 60th anniversary (SG60). This article summarises the measures most relevant to companies and business owners.
1. Corporate Income Tax Rebate for YA 2025
- Companies receive a 50% corporate income tax rebate for YA 2025.
- Companies that employed at least one local employee in 2024 receive a minimum cash payout of $2,000, paid automatically from the second quarter of 2025.
- The total benefit is capped at $40,000 per company.
2. Tax Schemes Extended and Enhanced
- Double Tax Deduction for Internationalisation (DTDi): the 200% tax deduction on qualifying market expansion costs is extended to 31 December 2030.
- Mergers & Acquisitions (M&A) scheme: extended to 31 December 2030, with a 25% allowance on qualifying acquisitions of up to $40 million per YA and a 200% deduction on transaction costs, capped at $100,000 per YA.
- Land Intensification Allowance: extended to 2030.
- Innovation cost-sharing: a 100% tax deduction for payments made under approved innovation cost-sharing agreements.
- Employee equity schemes: tax deduction for shares issued under employee equity-based remuneration schemes, from YA 2026.
3. Support for Enterprises
- Enterprise Financing Scheme: the Trade Loan cap is raised permanently from $5 million to $10 million.
- Market Readiness Assistance grant: the enhanced support cap of $100,000 per new market is extended to 31 March 2026.
- SkillsFuture Enterprise Credit: a new $10,000 credit for eligible companies with at least three resident employees, to support workforce and enterprise transformation.
- National Productivity Fund: topped up by $3 billion.
- Enterprise Compute Initiative: up to $150 million to help companies adopt AI tools and computing resources.
4. Workforce and Wages
- Progressive Wage Credit Scheme: government co-funding for wage increases given in 2025 raised from 30% to 40%, and for 2026 from 15% to 20%.
- Senior Employment Credit: extended to the end of 2026 to support the hiring of workers aged 60 and above.
- CPF monthly salary ceiling: rises to $8,000 from 1 January 2026, completing the increases announced earlier.
CPF contribution rates for senior workers from 1 January 2026:
| Employee age | Employer | Employee | Total |
|---|---|---|---|
| Above 55 to 60 | 16% | 18% | 34% |
| Above 60 to 65 | 12.5% | 12.5% | 25% |
5. Foreign Manpower Changes Announced Alongside the Budget
The Ministry of Manpower announced the following at its 2025 Committee of Supply debate:
- S Pass: minimum qualifying salary raised to $3,300 ($3,800 for financial services) for new applications from 1 September 2025, and for renewals from 1 September 2026.
- S Pass levy: a single levy of $650 a month applies across all tiers from 1 September 2025.
- Work Permit: from 1 July 2025, the maximum period of employment is removed and the maximum employment age is raised to 63.
6. Support for Households
- $800 in CDC vouchers per Singaporean household ($500 in May 2025 and $300 in January 2026).
- SG60 vouchers of $600 for Singaporeans aged 21 and above, and $800 for those aged 60 and above.
- A 60% personal income tax rebate for YA 2025, capped at $200.
What This Means for Your Business
Budget 2025 continued the cash relief of the corporate income tax rebate while extending key tax schemes to 2030, giving businesses more certainty for planning expansion and acquisitions. Employers should budget for higher CPF contributions for senior staff and the higher S Pass salary and levy requirements.
How We Can Help You
We can help you claim the tax rebate and deductions correctly, assess whether the DTDi and M&A schemes apply to your plans, and review your payroll and foreign manpower costs. Contact us to arrange a discussion.