On February 18, 2025, Singapore’s Prime Minister and Finance Minister, Mr. Lawrence Wong, presented the 2025 Budget. As the nation celebrates its 60th year of independence, the Budget focuses on strengthening economic resilience, addressing cost pressures, and investing in a more inclusive and sustainable future.
Despite global uncertainties, Singapore’s economy grew by 4.4% in 2024. However, growth is expected to slow in 2025, with projections between 1% and 3% and inflation estimated at 1.5% to 2.5%. The Budget aims to support businesses, workers, and individuals while fostering long-term economic stability.
Key Budget Proposals
For Businesses
- Corporate Tax: No changes to the standard 17% corporate tax rate
- Corporate Income Tax (CIT) Rebate: A 50% rebate on tax payable (capped at SGD 40,000) for the Year of Assessment (YA) 2025. Companies meeting the “local employee condition” can also receive a minimum SGD 2,000 in cash under the “CIT Rebate Cash Grant.”.
- Double Tax Deduction for Internationalization (DTDi) Scheme: Extended until December 31, 2030, offering a 200% tax deduction on qualifying international business expenses.
- Mergers & Acquisitions (M&A) Scheme: Extended until December 31, 2030. Companies can claim a 25% M&A allowance over five years on qualifying acquisitions (capped at SGD 40 million per YA) and a 200% tax deduction on transaction costs.
- Tax Deduction for Innovation Activities: A new 100% tax deduction for payments under an approved Cost-Sharing Agreement (CSA) for innovation activities, effective February 19, 2025.
For Employers
- Progressive Wage Credit Scheme (PWCS): Increased government co-funding levels for 2025 and 2026 from 30% and 15% to 40% and 20%, respectively.
- CPF Contribution Increase: From January 1, 2026, CPF contribution rates for workers aged 55 to 65 will rise by 1.5%, with employers contributing an additional 0.5%.
- Employment Credit Schemes:
- Senior Employment Credit (SEC): Extended until December 31, 2026, providing wage subsidies of up to 7% for hiring older workers.
- Uplifting Employment Credit (UEC): Extended until December 31, 2028, offering up to 20% wage subsidies for hiring ex-offenders.
- Enabling Employment Credit (EEC): Extended until December 31, 2028, supporting employment of people with disabilities with subsidies up to 20% of wages (capped at SGD 400 per month).
- CPF Transition Offset (CTO): Extended until 2026 to help businesses manage higher CPF costs.
For Individuals
- Personal Income Tax: No changes to tax rates, with progressive brackets ranging from 2% to 24% for YA 2024 onwards.
- Personal Income Tax Rebate: A rebate of up to 60% of tax payable (capped at SGD 200) for Singaporean residents in YA 2025 under the SG60 package.
- Goods and Services Tax (GST): Remains at 9%.
Other Notable Announcements
- SG60 Package: To celebrate Singapore’s 60th anniversary, the government will provide:
- SG60 vouchers of SGD 600 for all Singapore citizens aged 21 and above, and SGD 800 for those aged 60 and above.
- Medisave vouchers for healthcare support.
- Large Family Life SG credits for bigger families and Child Life SG credits for families with young children.
- SGD 800 in Community Development Council (CDC) vouchers per household.
- Enterprise Compute Initiative: SGD 150 million allocated to support businesses in leveraging AI tools and computing power.
- Global Founder Program: Set to launch in 2025 to encourage international entrepreneurs to establish and grow businesses in Singapore.
- Sustainability Initiatives: SGD 5 billion added to the Future Energy Fund to promote clean energy solutions.
These measures aim to ensure continued economic growth, innovation, and social stability while reinforcing Singapore’s position as a global business hub.