Singapore’s Budget 2025 introduces a series of strategic measures aimed at strengthening corporate businesses amidst global economic challenges. As the nation navigates rising global tensions, particularly between the United States and China, the government has unveiled targeted initiatives to support businesses in managing economic uncertainties and staying competitive.
Corporate Tax Relief and Wage Support
To ease financial pressures, the government has announced a 50% Corporate Income Tax (CIT) rebate for the Year of Assessment 2025, capped at S$40,000 per company. Active companies that employ at least one local worker in 2024 will receive a minimum rebate of S$2,000, enhancing cash flow for businesses adapting to rising operational costs.
Additionally, the Progressive Wage Credit Scheme (PWCS) has been enhanced, with co-funding levels increasing to 40% in 2025 and 20% in 2026. This move encourages businesses to support lower-wage workers while sharing the financial responsibility with the government.
Market Expansion and Innovation
Additional to the budget, on the 21st February 2025, MAS has announced that a vibrant equities market is essential for long-term business growth. To bolster local stock market activity, the Monetary Authority of Singapore (MAS) will inject S$5 billion into funds focused on Singapore-listed companies. This initiative aims to attract new listings, boost liquidity, and strengthen Singapore’s position as a global financial hub. Complementary tax incentives and a streamlined listing process will also make the Singapore Exchange (SGX) a more attractive destination for businesses considering public listing.
Furthermore, the government is reinforcing its commitment to innovation by investing S$1 billion in research and development (R&D) infrastructure, including a S$745 million semiconductor R&D facility. This investment is poised to enhance Singapore’s competitiveness in high-tech industries and drive long-term economic growth.
Positive Outlook for Singapore Equities
The alignment of these fiscal policies has strengthened investor confidence in Singapore’s financial markets. JP Morgan has upgraded Singapore equities to “overweight,” citing factors such as low valuations, strong dividend yields, and proactive government measures. Analysts forecast a 6% rise in the benchmark index, reflecting optimism about Singapore’s economic trajectory.
Conclusion
Singapore’s Budget 2025 delivers a comprehensive framework to support corporate businesses through tax relief, wage support, market revitalization, and innovation investments. These initiatives reinforce the country’s resilience and adaptability in a rapidly evolving global economy. At NS Global, we continue to monitor policy developments to help businesses navigate regulatory changes and seize growth opportunities.
For more insights on how Budget 2025 impacts your business, contact our team at NS Global today