Prime Minister and Minister for Finance, Mr Lawrence Wong, delivered Singapore’s FY2025 Budget Statement on 18 February 2025, in Parliament. In his opening remarks, Minister Wong highlighted Singapore’s strong recovery from the COVID-19 pandemic, but noted that the world was entering a period of greater global uncertainty and downside risks.
Pointing to Singapore’s strengths – a strong and well diversified economy supported by a highly skilled workforce, a strong army and diplomatic network, and a common Singaporean identity – Minister Wong stated that the budget builds on previous ones to address current challenges and secure the country’s future.
Relieving costs – a Corporate Income Tax rebate
Costs for both individuals and businesses have been rising, following the outbreak of war in Ukraine and other energy, food and supply chain disruptions. To relieve the costs pressures on businesses, a 50% Corporate Income Tax rebate in the Year of Assessment 2025 was introduced, with every active company that employed at least one local employee last year to receive a minimum benefit of $2,000. The total benefit that each company will receive will be capped at $40,000.
The Progressive Wage Credit Scheme was also enhanced, increasing the Government’s co-funding levels for wage increases from 30% in 2025 to 40%, and from 15% in 2026 to 20%.
Growing the economy
Alongside the short term measures are long term measures to grow the economy and increase productivity so that all Singaporeans can enjoy higher real incomes and better standards of living.
To this end the Budget emphasises three key areas: technology and innovation, our enterprise ecosystem, as well as Singapore’s infrastructure investments amidst resource constraints.
Enhancing technology and innovation engines
This is crucial because new ideas, innovation and technological progress are the drivers of growth. To anchor more high-quality investments the National Productivity Fund will be topped up by $3 billion, while investing to keep the R&D infrastructure at the cutting edge.
Strengthening the enterprise ecosystem
With the aim of making Singapore a place where exciting ventures develop and grow into the leading enterprises of the future. support schemes for internationalisation, and for mergers and acquisitions were extended. These include the Market Readiness Assistance Grant, the Double Tax Deduction for Internationalisation scheme, and the Mergers and Acquisitions scheme. The Enterprise Financing Scheme was also enhanced.
A Global Founder programme was also planned for launch later in the year to encourage global founders to anchor and grow more new ventures in Singapore. Additionally, $150 million for a new Enterprise Compute Initiative was set aside. Under this initiative, eligible enterprises will be partnered with major cloud service providers to access AI tools and computing power, as well as expert consultancy services. This will help enterprises leverage AI more effectively in their transformation journey.
Jornt Moerland, SVP, Asia Pacific, Mendix, says that “The injection of 150 million dollars into the Enterprise Compute Initiative will deeply benefit the enterprise ecosystem by lowering the barriers to entry for AI tools, optimising their tech resources and providing tailored technological solutions to address their unique business needs.
“These will support local enterprises in integrating novel technologies, such as AI-assisted development, into their existing processes and systems and in the long run enable them to cultivate an agile, change-ready, and adaptable tech stack.”
To facilitate companies’ access to capital, a new $1 billion Private Credit Growth Fund was introduced. To encourage companies listing on the Singapore Stock Exchange, recommendations from the Equities Market Review Group were taken on board, such as the introduction of tax incentives for Singapore-based companies and fund managers that choose to list in Singapore and grow their economic activities here.
Another measure is a tax incentive for fund managers which invest substantially in Singapore-listed equities, to encourage more investment in our capital markets.
Supporting workers through technological advancements
Acknowledging the need to support workers as technological advances, especially in AI, transforms workplaces and jobs, the government is investing heavily in lifelong learning, and have made significant moves to strengthen SkillsFuture.
Last year’s SkillsFuture Level-Up Programme granted all Singaporeans aged 40 years and above will get $4,000 in SkillsFuture Credit. Now, from next month, individuals can apply for a training allowance of up to $3,000 per month for selected full-time courses. They will have 24 months’ worth of allowance, which is up to $72,000 per worker.
To support workers who prefer to train while working, the training allowance is extended workers undergoing part-time training. These workers can enjoy a fixed allowance of $300 per month to defray their learning expenses.
Welcoming the announcement, Tahsin Alam, Regional Vice President and General Manager for Southeast Asia, at UiPath says that “with AI agents emerging as the next phase of AI-driven transformation across industries, organisations are presented with the opportunity to equip their workforce with the necessary skills to harness the technology and drive meaningful business outcomes.
“Initiatives like the new SkillsFuture Level-Up Programme will help mid-career workers transition and enhance their lifelong employability, while strengthening Singapore’s labour mobility.”
Additionally, the new SkillsFuture Workforce Development Grant will help companies restructure and upgrade their workforce to harness the full potential of AI integration in the workplace. Meanwhile, an enhanced tier of support under the Workfare Skills Support for lower-wage workers has been introduced. This enhanced support will be modelled after the SkillsFuture Level-Up Programme, and will benefit lower-wage workers when they turn 30.
To support companies that are upgrading their workforce, a new SkillsFuture Workforce Development Grant was introduced, bringing together existing schemes administered by Workforce Singapore and SkillsFuture Singapore, and simplify the application process. The new grant will also provide higher funding support of up to 70% for job redesign activities.
A new, redesigned SkillsFuture Enterprise Credit was also introduced. This is an existing scheme which helps employers defray the out-of-pocket costs for enterprise and workforce transformation, now redesigned to be more accessible.
The revamped credit will operate more like an online wallet, where companies can easily check how much they have, and use the credits to immediately offset out-of-pocket costs for eligible workforce transformation initiatives and courses, rather than do so on a reimbursement basis.
All companies with at least three resident employees will get a fresh $10,000 in the redesigned SkillsFuture Enterprise credit. The new credit will be available in the second half of 2026 and will last for three years. Meanwhile, companies can continue to use the existing credit. It was originally due to expire in June this year, but we will extend it until the new credit is ready.
Concurrently, additional funding of around $200 million for NTUC’s Company Training Committees (CTC) grant, was set aside to help more companies transform. The CTC grant was also expanded to support employer-led training that leads to formal qualifications or certifications.
