Singapore’s Budget 2026 delivers a broad package of support for businesses, with a strong emphasis on AI adoption, internationalisation, and enterprise transformation.
Key highlights include a 40% CIT Rebate (capped at S$30,000) for YA 2026, higher grant support levels across multiple schemes, expanded tax deductions for overseas expansion, and new incentives for AI investment.
Here’s a breakdown of the measures that matter most for businesses.
Business Grants and Funding Schemes
Raise the Local Qualifying Salary (“LQS”)
Firms employing foreign workers (e.g., Work Permit, S Pass or Employment Pass holders) must meet both of the following conditions:
- Pay Progressive Wage Model (“PWM”) wages to local employees covered by the relevant Sectoral or Occupational PWMs; and
- Pay all local employees not covered under PWMs at least the LQS.
The Government will raise the LQS from S$1,600 to S$1,800 for full-time local workers. Foreign worker quota computations will be adjusted accordingly:
- 1 local workforce count: Per local worker earning at least S$1,800 per month
- 0.5 local workforce count: Per local worker earning at least S$900 but below S$1,800 per month
These changes take effect from 1 July 2026.
Extension and Enhancement to the Progressive Wage Credit Scheme (PWCS)
PWCS co-funding will increase from 20% to 30% for wage increases in qualifying year 2026, with support extended to qualifying years 2027 and 2028 at 30% and 20% respectively.
For qualifying year 2026, the following conditions remain unchanged:
- Employee’s average gross monthly wages must be up to S$3,000 before the wage increase
- Employee’s average gross monthly wages must be up to S$4,000 after the wage increase
- Average gross monthly wage increase of at least S$100 per qualifying year
- Wage increases are co-funded for two years, provided they are sustained
From qualifying years 2027 and 2028, the minimum qualifying wage increase will rise to S$200 (from S$100). All other conditions remain the same.
Enhancement to the Market Readiness Assistance (“MRA”) Grant
From 1 April 2026, the MRA grant will be enhanced as follows:
- Support level increases to up to 70% (from the current 50%) of eligible costs for local SMEs, applicable until 31 March 2029
- The enhanced grant cap of S$100,000 per company per new market will be extended
- From the second half of 2026, the “new to target overseas market” criterion will be removed
Enhancement to Internationalisation Grant Support Levels
From 1 April 2026 to 31 March 2029, local SMEs will receive up to 70% support on eligible costs, and local non-SMEs up to 50%, for the following grants:
- Business Adaptation Grant (until 6 October 2027) — helping enterprises affected by tariffs adapt operations and strengthen supply chain resilience through advisory and reconfiguration support
- Global Innovation Alliance schemes — supporting Singapore-based startups in overseas expansion through market access programmes and in-market expert connections, with a technology and innovation focus
Enhancement to Enterprise Financing Scheme (“EFS”) Loan Quantum
To give Singapore enterprises better access to financing at all growth stages, the maximum loan quantum for EFS – SME Fixed Assets Loan and EFS – Trade Loan has been revised:
- Borrower and borrower group caps for each loan facility will be lifted
- Subject to an overall loan exposure limit of S$50 million per borrower group across all EFS facilities
Expansion of the Productivity Solutions Grant (“PSG”)
In support of AI adoption, a broader range of AI-enabled solutions will be made available to businesses under the PSG.
Other Business-related Updates
Corporate Income Tax
CIT Rebate for YA 2026 with a minimum benefit of S$1,500 for eligible active companies
To help companies manage cost pressures, a CIT Rebate of 40% of tax payable will be granted for YA 2026.
Active companies that made CPF contributions for at least one local employee (Singapore Citizen or Permanent Resident, excluding shareholders who are also directors) in 2025 will automatically receive a S$1,500 cash payout (“CIT Rebate Cash Grant”) from Q2 2026 onwards.
The combined maximum benefit of CIT Rebate and CIT Rebate Cash Grant is capped at S$30,000.
Example: Company A has tax payable of S$30,000 for YA 2026. It will receive a CIT Rebate of S$12,000 (40% × S$30,000). If it employed at least one local employee in 2025, S$1,500 goes to the CIT Rebate Cash Grant, with the remaining S$10,500 applied as CIT Rebate.
Enhancement to the Double Tax Deduction for Internationalisation (“DTDi”) Scheme
The DTDi scheme lets businesses claim a 200% tax deduction on eligible expenses across 16 qualifying market expansion and investment development activities.
Currently, businesses can claim the 200% deduction on the first S$150,000 of eligible expenses for nine activities per YA without prior approval. Approval from Enterprise Singapore (EnterpriseSG) or the Singapore Tourism Board (STB) is required for amounts exceeding S$150,000 on those nine activities, or for expenses on the remaining seven qualifying activities. Prior approval is also needed for certain overseas market development and investment study trip expenses.
Key changes:
- The expenditure cap for claims without prior approval will be raised from S$150,000 to S$400,000 per YA
- The scope of claims not requiring prior approval will expand to cover all eligible expenses on overseas market development trips and investment study trips, plus these five qualifying activities:
- Investment feasibility / due diligence studies
- Master licensing and franchising
- Market surveys / feasibility studies
- Overseas business development
- Production of corporate brochures for overseas distribution
- Businesses can still apply to EnterpriseSG or STB for expenses exceeding S$400,000 per YA, or for overseas trade office and e-commerce campaign expenses
These changes apply to expenses incurred from YA 2027.
Enhancement to the Enterprise Innovation Scheme (“EIS”)
Under the EIS, qualifying businesses can claim 400% tax deductions/allowances on qualifying expenditure across 5 activities, capped between S$50,000 and S$400,000 per activity per YA.
To promote AI adoption, the EIS will be enhanced for YAs 2027 and 2028:
- Partner institutions will be expanded to include the sectoral AI Centre of Excellence for Manufacturing
- A new qualifying activity for AI expenditures will be introduced — businesses can claim 400% tax deductions/allowances on up to S$50,000 of qualifying AI expenditures per YA (note: the cash payout conversion option will not apply to this new activity)
Extension and Enhancement of the Finance and Treasury Centre (“FTC”) Incentive
- FTC incentive extended until 31 December 2031
- The withholding tax exemption scope for approved FTCs will expand to include interest-like borrowing costs subject to withholding tax, for loans used in qualifying activities or services
- The expanded exemption applies to payments made on or after 13 February 2026
Extension and Enhancement of the Global Trader Programme (“GTP”)
- GTP extended until 31 December 2031
- Environmental Attribute Certificates added to the list of qualifying commodities from 13 February 2026
Tax Deduction for CPF Cash Top-ups by Platform Operators
To encourage platform operators to make CPF cash top-ups for their platform workers (eligible under the Matched MediSave Scheme), operators will be allowed to claim a tax deduction for these contributions.
This applies from YA 2027 for CPF cash top-ups made from 1 January 2026.
Extension of Schemes
The following schemes have been extended:
- Withholding tax exemptions for the financial sector — until 31 December 2031
- Not-for-Profit Organisation Tax Incentives — until 31 December 2032
- 250% tax deduction for qualifying donations to IPCs and eligible institutions — until 31 December 2029
- Corporate Volunteer Scheme — until 31 December 2029
Schemes Allowed to Lapse
The following schemes will be allowed to lapse:
- Investment Allowance for Emissions Reduction scheme
- Double tax deduction for qualifying upfront costs attributable to related retail bonds
For the full Singapore Budget 2026 speech, visit singaporebudget.gov.sg.
