Singapore Budget 2025: Small Business Impact

Corporate Tax Relief Measures

Active companies will benefit from a 50% corporate income tax rebate for the 2025 Year of Assessment, with a cap of S$40,000 per company. Loss-making businesses employing at least one local employee in 2024 qualify for a minimum cash grant of S$2,000. To be eligible, companies must have made CPF contributions for at least one local worker in 2024. Notably, the rebate is reduced to S$38,000 for companies that claim the S$2,000 grant, ensuring a balanced distribution of benefits across different business scenarios.

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Workforce Development Initiatives

The Progressive Wage Credit Scheme (PWCS) sees a significant boost, with government co-funding for wage increases of lower-wage workers rising to 40% in 2025 and 20% in 2026, up from 30% and 15% respectively. To support mid-career workers, a fixed S$300 monthly allowance will be introduced from 2026 for those enrolled in part-time training, offsetting learning expenses. Additionally, the Jobs Growth Incentive (JGI) has been extended, providing continued subsidies for businesses hiring mid-career and senior workers.

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Digital Transformation Support

The Enterprise Compute Initiative, a S$150 million fund, will partner businesses with cloud providers to integrate AI solutions, offering access to computing power and expert consultancy. This initiative is complemented by an expanded Productivity Solutions Grant (PSG), which now provides increased funding for automation, AI, and data analytics tools to reduce operational costs and enhance efficiency. Additionally, a S$1 billion Private Credit Growth Fund has been established to provide alternative financing options for high-growth local enterprises. These measures aim to accelerate digital transformation and AI adoption among small businesses, positioning them for growth in an increasingly technology-driven economy.

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Financial Incentives for SMEs

To bolster the financial resilience of small and medium-sized enterprises (SMEs), Budget 2025 introduces several targeted incentives. The Global Founder Programme, launched by EDB, supports internationalisation and mergers/acquisitions through partnerships with multinational firms, enabling local businesses to expand their global footprint. Additionally, sustainability-focused grants and tax incentives are available for SMEs adopting eco-friendly practices, such as energy-efficient systems, aligning with Singapore's green agenda while reducing utility costs.

• Continued rental relief for businesses operating in government-owned properties
• Enhanced support for high-growth local enterprises through the S$1 billion Private Credit Growth Fund
• Expanded Productivity Solutions Grant (PSG) to fund automation, AI, and data analytics tools
• U-Save Utilities Rebates of up to S$760 for eligible HDB households, indirectly benefiting small businesses by increasing consumer spending power