A Comprehensive Overview of the Singapore Budget 2025: Key Measures and Annex Highlights

The Singapore Budget 2025 has introduced a series of strategic measures to manage business costs for local companies, enhance technology and innovation engines, strengthen the enterprise ecosystem and invest in infrastructure. Here below are listed some key highlights:

1. Business Support: Tax Reliefs and Incentives

Corporate Income Tax (CIT) Rebate and Cash Grant

To support business cash flow, a 50% CIT rebate on payable taxes will be introduced in Year of Assessment (YA) 2025. Additionally, active businesses with at least one local employee in Calendar Year (CY) 2024 will receive a minimum CIT Rebate Cash Grant of $2,000. The total maximum benefits (i.e., the sum of the CIT Rebate and CIT Rebate Cash Grant) that a company may receive is $40,000. Eligible companies will automatically receive the benefits from 2Q CY 2025 onwards.

Progressive Wage Credit Scheme (PWCS)

Introduced in Budget 2022, the PWCS supports wage increases for lower-income workers until CY 2026. Eligible employees must have an average gross monthly wage of up to $3,000 before the increase, and up to $4,000 after, with a wage increase of at least $100 in each qualifying year. Wage increases in each qualifying year are co-funded for two years if sustained.

2. Support for Internationalization and Mergers & Acquisitions

Market Readiness Assistance Grant: Extended to March 31, 2026

The increased grant cap of $100,000 per new market, originally set to expire on March 31, 2025, has been extended until March 31, 2026. This measure aims to help local SMEs expand internationally.

Double Tax Deduction for Internationalization (DTDi): Extended to 2030

Companies can continue to benefit from a 200% tax deduction on qualifying market expansion and investment development expenses until December 31, 2030, to reinforce efforts to help businesses internationalize.

Enterprise Financing Scheme (EFS): Extended to March 31, 2030

The EFS helps Singapore enterprises access financing across various stages of growth. Two enhancements have been announced:

• The maximum loan quantum under the EFS – Trade Loan is permanently raised from $5 million to $10 million, recognizing increased trade financing needs and supporting internationalisation efforts.
• The scope of the EFS – M&A Loan is expanded beyond equity acquisitions to support targeted asset acquisitions from April 1, 2025 to March 31, 2030.

Mergers & Acquisitions Scheme: Extended to 2030

Originally set to end in 2025, this scheme has been extended until December 31, 2030. Eligible businesses can benefit from:

• An M&A allowance (written down over five years) based on 25% of up to $40 million in qualifying acquisitions per YA (i.e., $10 million).
• A 200% tax deduction on transaction costs (capped at $100,000 per YA), subject to specified conditions.

3. Key Tax Changes

Corporate Income Tax and Personal Income Tax Rebates

• Eligible companies will benefit from a 50% Corporate Income Tax (CIT) rebate for YA 2025, with a minimum benefit of $2,000.
• A Personal Income Tax (PIT) rebate for YA 2025 will also be provided.

Enhancements to Section 13W of the Income Tax Act 1947

Eligible companies will gain upfront certainty of non-taxation for companies’ disposal gains.

New Tax Incentives for the Equity Market

Incentives will be introduced to encourage IPOs and boost investments in Singapore-listed equities, in line with the recommendations of the Equities Market Review Group.

Conclusion

The measures in Budget 2025 maintain a strategic focus on economic growth and support for businesses in a thriving ecosystem. The new incentives, including tax reliefs, wage support, and financing for internationalization, strengthen business competitiveness in an uncertain global landscape.

Diacron Group specializes in accounting, tax advisory, HR & Payroll and corporate services. Our team of experts can assist you in assessing eligibility, ensuring compliance, and maximizing the benefits available under the Singapore Budget 2025. Contact us today to explore tailored solutions for your business success.