The Singapore Parliament building. Prime Minister Lawrence Wong noted in his 2025 budget that while the country’s economy grew by more than 4% in 2024, it will be difficult to achieve that level of growth on a sustained basis.
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Singapore has announced a slew of support measures for both households and businesses in its 2025 fiscal year ending March 2026, including vouchers and tax breaks, in its first budget under Prime Minister Lawrence Wong.
Wong said that this comes amid concerns over rising costs, given the rise in global inflation following the Russia-Ukraine war and disruptions in energy, food and supply chains.
Wong announced more consumption vouchers and utility rebates for households. Each household will receive 800 Singapore dollars ($596) in consumption vouchers over the course of 2025.
In commemoration of Singapore’s 60th year of independence, all Singaporeans above 21 will also receive an additional SG$600 worth of vouchers in July, with those above 60 getting SG$800.
A 60% personal income tax rebate was also announced for the year of assessment 2025, capped at SG$200.
On the business front, Wong announced a 50% rebate for corporate income tax for companies, with a minimum of SG$2,000 and a cap of SG$40,000.
The government will also increase co-funding levels for companies who raise the salaries of lower wage workers.
While Wong said that these measures, along with those announced in previous budgets, will mitigate the impact of rising costs, he added that “the best way to adjust to higher prices is to grow the economy and increase productivity, so that Singaporeans can enjoy higher real incomes and better standards of living.”
Supporting businesses
In his speech, Wong said the country will take “bold and decisive actions to advance our growth frontier.”
Noting that global economic competition is intensifying, he pointed out that “if we fail to stay competitive, we will be left behind.”
He noted that while the country’s economy grew by more than 4% in 2024, it will be difficult to achieve that level of growth on a sustained basis.
Wong added that if Singapore could secure an average of 2%-3% growth per annum over the next decade, “we will be able to create better jobs and opportunities, and improve standards of living for all Singaporeans.”
In light of that, Wong said, the government will extend support programs for companies that want to internationalize, as well as for mergers and acquisitions.
Singapore will also introduce a new SG$1 billion Private Credit Growth Fund to give companies more financing options, Wong said, attributing the decision to the emergence of a private credit market that offers “innovative financing solutions to companies.”
Wong also pointing out that as companies scale up, they may also want to list on a stock exchange to access more capital.
Back in August 2024, Singapore’s monetary authority set up a review group to strengthen the attractiveness of the Singapore stock market.
The review group submitted its first set of measures on Feb. 13, including several tax-related recommendations.
Wong said he has accepted the recommendations, and will introduce tax incentives for Singapore-based companies and fund managers that choose to list in Singapore and grow their economic activities here.
Tax incentives for fund managers will be given to those who “invest substantially” in Singapore’s capital markets, in order to encourage more investment in the country’s capital markets.
Fiscal position
In the 2024 fiscal year, Wong said, revenue collection was “better than expected,” mainly because of an upside in corporate income tax.
He said that collections increased “significantly” in the last two years, and projected that corporate income tax takings will rise to 4.1% in the 2024 fiscal year, up from about 3.2% in the past.
That’s despite higher expenditure, such as top-ups to Singaporeans’ medical savings accounts and the earmarking of projects such as a fifth terminal for Changi International Airport.
The government therefore expects to end its 2024 fiscal year with a surplus of SG$6.4 billion, or 0.9% of gross domestic product.
For its 2025 fiscal year, it expects to end with a surplus of $6.8 billion.
Under the Singapore Constitution, a government must maintain a balanced budget in each term of government, and can tap past reserves only with presidential approval. The government is not allowed to borrow to fund its operating expenses.
This is a developing story, please check back for updates.