Singapore Budget 2025

The SG60 Budget, aptly themed “Onward together for a better tomorrow”, reflects the country’s ambition to propel forward into the next lap of inclusive and sustainable economic growth. In celebration of Singapore’s 60th year of independence, expectations ran high that it would be a Budget shaped by the aspirations and views of Singaporeans from all walks of life.

The SG60 Budget met these expectations on many counts.

A generous package, notably the SG60 vouchers, will be given to all Singaporeans, with more going to Singaporean senior citizens. This year, all Singapore citizen babies born will also receive an SG60 Baby Gift. These are in addition to a myriad of support for individuals, including the CDC vouchers, U-Save rebates, LifeSG credits, top-ups to Edusave accounts and increase in ComCare Assistance.

Targeted updates to the tax code

To bolster support for businesses and individuals, rebates of 50% on corporate income tax (capped at S$40,000) and 60% on personal income tax (capped at S$200) will be provided for the Year of Assessment 2025. The corporate tax rebate is similar to that of prior year.

There are a few interesting refinements to existing tax schemes. An example is the tax deduction for payments made for issuance of new shares under employee equity-based remuneration schemes. This refinement better positions businesses in the war for talent.

Expanding the scope of tax deductions under an approved cost-sharing agreement to include innovation activities is a noteworthy example of the Government’s support for R&D activities in Singapore. This will reduce uncertainty and compliance costs for businesses and allow them to further invest to grow.

Making section 13W a permanent feature of Singapore’s tax code by removing its sunset clause is also a long-awaited change. Added to the upfront certainty of non-taxation of companies’ gains on disposal of their equity investments, the scope of this safe harbour provision will be broadened to also include gains on disposal of preference shares. While we remain hopeful for the other conditions for the safe harbour to be further relaxed, we commend the proposed changes.

The Budget also announced new tax incentives targeted at revitalising the Singapore equity market, such as the generous tax rebate for newly listed companies. In tandem, sector-specific tax measures in the areas of financial services, real estate and maritime shipping have been initiated to buttress Singapore’s competitiveness in these key sectors. 

Read EY Singapore Budget News Alert for details of the above tax changes, as well as other measures that continue to drive transformation and sustainability.