Singapore Budget 2026 A round-up of key measures

Central to this strategy is a comprehensive suite of measures aimed at enhancing enterprise competitiveness and alleviating immediate cost pressures. The post-SG60 support measures include: 

• Grant of Corporate Income Tax Rebate for Year of Assessment (“YA”) 2026
• Enhancement to Support Schemes for Internationalisation
• Enhancement to the Progressive Wage Credit Scheme (“PWCS”)
• Expansion to Enterprise Innovation Scheme (“EIS”)

The Budget also places a strategic emphasis on the burgeoning AI economy, introducing the Champions of AI programme to provide tailored support for comprehensive business transformation. To further incentivise technological adoption, the EIS has been expanded to include AI expenditures, offering a substantial 400% tax deduction. These initiatives, alongside the S$37 billion research, innovation and enterprise (“RIE2030”) investment, ensure that Singaporean businesses remain at the forefront of global technological trends.

Recognising that a future-ready workforce is the backbone of a competitive economy, the Budget introduces several manpower-related enhancements. The PWCS co-funding has been increased to 30% for 2026 and extended through 2028, helping businesses manage rising wage costs while uplifting lower-wage workers. Additionally, the merger of SkillsFuture Singapore and Workforce Singapore into a single statutory board will provide a seamless "one-stop agency" for skills training and job matching, ensuring that local talents are equipped with the AI competencies and advanced skills required for the sectors of tomorrow.

Main highlights 

The Singapore Budget 2026 introduces a range of strategic AI advantages and opportunities for all Singaporeans and businesses operating in Singapore. Notably, the Government has extended the Corporate Income Tax (“CIT”) Rebate from the previous year. Companies will benefit from a 40% tax rebate, capped at S$30,000 for YA 2026. Even non-profitable companies can take advantage of this initiative, qualifying for a CIT Rebate Cash Grant of S$1,500 if they employed at least one local employee with CPF contributions in 2025.

Beyond immediate tax relief, the Budget underscores a strong commitment to strengthening Singapore's capital market and enterprise ecosystem. The government will roll out additional measures to attract high-quality listings and support companies across different stages of growth. It will also implement further recommendations from the Equities Market Review Group, including streamlining listing processes and establishing a dual-listing bridge between the SGX and Nasdaq. Through the Startup SG Equity, it also gives enhanced access to capital for scaling deep-tech startups. Beyond the capital market, the Economic Development Board will intensify efforts to anchor high-growth companies with strong fundamentals and leadership potential in Singapore, fostering a dynamic environment for local enterprises to thrive and scale.

A central pillar of Budget 2026 is the national push to harness AI as a strategic advantage. This involves expanding initiatives that support AI adoption and transformation across industries. This incentivizes businesses to invest in AI capabilities, driving productivity gains and fostering innovation. In line with global sustainability trends, the Budget also extends support for businesses to adopt energy-efficient and sustainable solutions. The Energy Efficiency Grant (“EEG”) continues to be available, and green loans under the Enterprise Financing Scheme (“EFS”) remain supported. These provisions enable firms to manage operational costs while contributing to Singapore's sustainability goals, positioning them for long-term resilience in a green economy.

Overall, Budget 2026 provides a meaningful boost to businesses, equipping them with the tools and confidence to move forward amid global headwinds. With growth expected to remain moderate and geopolitical uncertainties persisting, Singapore’s proactive focus on AI advancement and transformation, internationalisation, and strategic investment positions itself well to attract foreign investment and enable local enterprises to seize opportunities during a time of profound global change, ensuring they can scale up and globalise to remain competitive and relevant in the global arena.

For businesses

Corporate Income Tax

Corporate Income Tax (“CIT”) Rebate in Year of Assessment (“YA”) 2026 with a minimum benefit of S$1,500 for eligible active companies 

• To support companies in managing cost pressures, a CIT Rebate of 40% of tax payable will be granted in YA 2026.
• Companies that are active and have made CPF contributions to at least one local employee (i.e., Singapore Citizen or Permanent Resident, excluding shareholders who are also directors of the company) in 2025 will automatically receive a cash payout of S$1,500 (referred to as “CIT Rebate Cash Grant”) from 2Q 2026 onwards.
• The total maximum benefits of CIT Rebate and CIT Rebate Cash Grant is capped at S$30,000.
• For example, Company A has tax payable of S$30,000 for YA 2026 and will receive a total CIT Rebate benefit of S$12,000 (i.e., 40% * S$30,000). If Company A employed at least one local employee in 2025, it will receive a S$1,500 CIT Rebate Cash Grant, with the remaining S$10,500 as CIT Rebate.

Enhancement to the Double Tax Deduction for Internationalisation (“DTDi”) scheme

• The DTDi scheme allows businesses to claim a 200% tax deduction on eligible expenses incurred on 16 qualifying market expansion and investment development expenses.
• Businesses can claim 200% tax deduction on the first S$150,000 of eligible expenses for nine activities per YA without prior approval.
• Prior approval is required from Enterprise Singapore (EnterpriseSG) or Singapore Tourism Board (STB) for expenses exceeding S$150,000 on these nine activities or expenses incurred on the remaining seven qualifying activities.
• Prior approval is also required for certain expenses incurred on overseas market development trips and overseas investment study trips.
• To further support businesses in their internationalisation efforts, the expenditure cap for claims without prior approval will be raised from S$150,000 to S$400,000 per YA.
• The scope of claims which do not require prior approval will be expanded to cover all eligible expenses incurred on overseas market development trips and overseas investment study trips, and the following five qualifying activities: -
  • Investment feasibility / due diligence studies;
  • Master licensing and franchising;
  • Market surveys / feasibility studies;
  • Overseas business development; and
  • Production of corporate brochures for overseas distribution.
• Businesses can continue to apply to EnterpriseSG or STB for expenses exceeding S$400,000 per YA or expenses incurred on overseas trade office and e-commerce campaigns.
• The changes will apply to expenses incurred from YA 2027.

Enhancement to the Enterprise Innovation Scheme (“EIS”)

• Under the EIS, qualifying business can claim 400% tax deductions/allowances on qualifying expenditure incurred on the 5 qualifying activities, capped between S$50,000 to S$400,000 for each activity and each YA.
• To support businesses in adopting AI, the EIS will be enhanced for YAs 2027 and 2028:-
  • The list of partner institutions will be expanded to include the sectoral AI Centre of Excellence for Manufacturing.
  • An additional qualifying activity will be introduced for qualifying AI expenditures. Businesses can claim tax deductions/allowances of 400% on up to S$50,000 of qualifying AI expenditures incurred for each YA. The option to convert qualifying expenditure into a cash payout will not be available for this new qualifying activity. 

Extension and enhancement of the Finance and Treasury Centre (“FTC”) incentive

• FTC incentive will be extended till 31 December 2031.
• In addition, the scope of the withholding tax exemption for approved FTCs will be expanded to include interest-like borrowing costs that are subject to withholding tax, for loans used for qualifying activities or services.
• The expanded scope of exemption applies to payments made on or after 13 February 2026.

Extension and enhancement of the Global Trader Programme (“GTP”)

• GTP will be extended until 31 December 2031.
• The list of qualifying commodities will be expanded to include Environmental Attribute Certificates from 13 February 2026.

Allowing tax deduction for CPF cash top-ups made by platform operators on behalf of their platform workers under the Voluntary Contributions to MediSave Account scheme

• To encourage platform operators to make CPF cash top-ups on behalf of their platform workers (who are eligible for the Matched MediSave Scheme), platform operators will be allowed to claim tax deduction for CPF cash top-ups made on behalf of their platform workers under the scheme.
• The change will apply from YA 2027 for CPF cash top-up made from 1 January 2026.

Extension of Schemes

The following schemes will be extended:-

• Withholding tax exemptions for the financial sector (extended till 31 December 2031);
• The Not-for-Profit Organisation Tax Incentives (extended till 31 December 2032);
• 250% tax deduction for qualifying donations to Institutions of a Public Character (“IPCs”) and eligible institutions (extended to 31 December 2029);
• Corporate Volunteer Scheme (extended to 31 December 2029).

Schemes to lapse

The following schemes will be allowed to lapse:-

• Investment Allowance for Emissions Reduction scheme;
• Double tax deduction for qualifying upfront costs attributable to related retail bonds

For the People

Personal Income Tax

Extension of 250% tax deduction for qualifying donations to IPCs and eligible institutions

• The 250% tax deduction will be extended to qualifying donations made from 1 January 2027 to 31 December 2029.

Central Provident Fund (CPF)

Increase in Senior Worker (aged 55 to 65) CPF Contribution Rates

• The increase in CPF contribution rates for senior workers was first implemented in 2022.
• The next increase in senior worker CPF contributions rates will take place on 1 January 2027, with total CPF contribution rates increased by between 1.0 to 1.5 per cent. Similarly, a one-year CPF transition offset (equivalent to half of the 2027 increase in employer CPF contribution rates) will be provided to the employers.

Grants and Other Schemes 

Raise the Local Qualifying Salary (“LQS”)

• Firms that hire foreign workers (e.g., Work Permit, S Pass or Employment Pass holders) are required to meet both of the following conditions:
  • Firms must pay Progressive Wage Model (“PWM”) wages to local employees covered by the relevant Sectoral or Occupational PWMs; and
  • Firms must pay all local employees not covered under the PWMs at least the LQS.
• The Government will raise the LQS from S$1,600 to S$1,800 for full-time employed local workers.
• The computation of foreign worker quotas will correspondingly be adjusted with the new LQS:-
  • 1 local workforce count: Per local worker who is paid at least S$1,800 per month; and
  • 0.5 local workforce count: Per local worker who is paid at least S$900 but less than S$1,800 per month.
• These measures will take effect from 1 July 2026

Extension and Enhancement to the Progressive Wage Credit Scheme (PWCS)

• PWCS co-funding support will be raised for wage increases given in the qualifying year 2026 from 20% to 30% and extended to qualifying years 2027 and 2028 at 30% and 20% respectively.
• The following conditions remain the same for qualifying year 2026:
  • Employee has average gross monthly wages of up to S$3,000, before the wage increase;
  • Employee has average gross monthly wages of up to S$4,000, after the wage increase;
  • Average gross monthly wage increase must be at least S$100 in each qualifying year; and
  • Wage increase in each qualifying year will be co-funded for two years if the wage increase is sustained.
• The minimum qualifying wage increase for PWCS will be raised to S$200 (instead of S$100) for wage increases in qualifying years 2027 and 2028. All other conditions remain the same. 

Enhancement to the Market Readiness Assistance (“MRA”) Grant

• From 1 April 2026, the MRA grant will be enhanced, as follows:-
• The grant support level will be increased. Local SMEs will receive support of up to 70% (from current 50%) of eligible costs. The higher support level is applicable until 31 March 2029.
  • The enhanced grant cap of S$100,000 will be extended. Local SMEs will continue to receive grant support of up to $100,000 per company per new market.
• From the second half of 2026, the “new to target overseas market” criterion of the MRA grant will be removed.

Enhancement on the grants support levels for internationalisation schemes 

• From 1 April 2026 to 31 March 2029, local SMEs will receive support of up to 70% of eligible costs, and local non-SMEs will receive support of up to 50% of eligible costs on the following grants:-
  • Business Adaptation Grant (until 6 October 2027) – to help local enterprises impacted by tariffs to adapt their business operations and strengthen supply chain resilience through advisory and reconfiguration support.
  • Global Innovation Alliance schemes – to support Singapore-based startups to expand overseas, through participating in market access programmes and connecting with in-market experts, with a focus on technology and innovation.

Enhancement on the loan quantum under the Enterprise Financing Scheme (“EFS”) 

• To enable Singapore enterprises to access financing more readily across all stages of growth, the maximum loan quantum for EFS – SME Fixed Assets Loan and EFS – Trade Loan has been revised:-
  • The borrow and borrower group caps for each loan facility will be lifted;
  • Subject to an overall loan exposure limit of S$50 million per borrower group across all EFS facilities. 

Expansion of the Productivity Solutions Grant (“PSG”)

• To support businesses in AI adoption, a wider range of AI-enabled solutions will be made available for businesses under the PSG.

For the full Singapore Budget 2026 speech, please click here.

If you would like to discuss the impact on your organisation, our team is ready to connect. 

Contact us

Faye Liu
Director, Tax Services
T +65 6854 9068 
E [email protected] 

Eng Hock Tan 
Senior Manager, Tax Services 
T +65 6236 3489  
E [email protected]  

Lionel Leung
Manager, Tax Services  
T +65 6854 8046 
E [email protected] 

Lim Fei Fan 
Manager, Tax Services 
T +65 6854 9071 
E [email protected]