Singapore Budget 2025: Business and Industry Sector Impact
Singapore’s Budget 2025 introduces several initiatives to support Small and Medium Enterprises (SMEs) and businesses. These measures aim to lower operational costs, drive innovation, and improve competitiveness across various sectors. The government will provide a 50% Corporate Income Tax rebate for the Year of Assessment 2025.
Active companies employing at least one local worker in 2024 will receive a cash grant of at least S$2,000. The total benefit for each company will be capped at S$40,000. To help businesses manage wage increments for lower-income employees, the Progressive Wage Credit Scheme (PWCS) will offer higher co-funding levels. In 2025, co-funding will increase to 40%, up from the previous 30%. In 2026, the rate will adjust to 20%, rising from the previous 15%. This enhancement helps employers balance wage growth while mitigating financial pressures.
The government will inject an additional S$3 billion into the National Productivity Fund (NPF). This funding will support industry transformation and boost productivity projects. The investment will focus on technology, life sciences, and semiconductors. Moreover, businesses in these sectors will receive resources to innovate and stay competitive.
The government has set aside over S$10 billion for research and development (R&D) and infrastructure projects. This includes S$1 billion for a national semiconductor R&D facility. Overall, these investments will strengthen Singapore’s position as a technology hub and attract high-value industries.
To speed up AI adoption in businesses, the government will launch the Enterprise Compute Initiative. This program has a budget of S$150 million. Companies will collaborate with top cloud service providers to access AI tools, computing power, and consultancy services. SMEs will gain the most from this initiative. Above all, it will help them improve efficiency and create innovative solutions.
However, not all industries stand to gain from Budget 2025. The Singapore Exchange (SGX) and financial trading sector will not benefit directly as there are no specific incentives aimed at boosting market activity or easing regulatory pressures. Traditional retail businesses and non-tech-driven service industries will also receive limited support, as the government focuses on digitalization, innovation, and high-value manufacturing. The government did not announce major new infrastructure projects, so the construction sector will not see significant direct benefits. Businesses in this sector can only rely on general productivity grants for support. Overall, Budget 2025 prioritizes industries that drive economic transformation while leaving some traditional sectors to navigate challenges on their own.
