Insights and Updates | Nexia Singapore Blogs

The Singapore Budget 2026 is presented against a backdrop of heightened global uncertainty, ongoing cost pressures and rapid technological advancement. In response, the Government adopted a calibrated policy stance that balances targeted, short-term support with sustained investments in innovation, enterprise capabilities and workforce resilience.

The key themes emerging from Singapore Budget 2026 include:

Corporate Tax Support. Continued, though more measured, corporate income tax (“CIT”) support to help businesses navigate near-term operating pressures.

Internationalisation. Strengthened measures to support internationalisation and overseas expansion, particularly for small and medium-sized enterprise (“SME”)s.

AI Transformation. A strong emphasis on artificial intelligence (“AI”) and innovation, with enhanced tax incentives and ecosystem-level initiatives introduced to support adoption from the Year of Assessment (“YA”) 2027.

Workforce Resilience. Ongoing efforts to address demographic shifts through workforce-related measures, including adjustments to the Central Provident Fund (“CPF”) contribution rates for senior workers.

Taken as a whole, Singapore Budget 2026 prioritises capability-building, adaptability and sustainable competitiveness, positioning Singapore not merely to keep pace with global change, but to remain resilient and relevant in an increasingly complex and interconnected world.

IMPACT TO BUSINESSES:

CIT Rebate and CIT Rebate Cash Grant

To support cost pressures faced by businesses, a CIT rebate of 40% of tax payable will be available for the YA 2026.
Active companies that have at least one local employee in 2025 will receive a minimum benefit of S$1,500. This support will be provided as a cash grant under the CIT rebate scheme and the tax rebate is non-taxable.
The maximum benefits of the CIT Rebate YA 2026 and CIT Rebate Cash Grant YA 2026 that a company can receive are capped at S$30,000.

Double Tax Deduction for Internationalisation (“DTDi”) Scheme

To further support businesses in their internationalisation efforts, the expenditure cap for claims without prior approval will be increased from S$150,000 to S$400,000 per YA from the YA 2027.
The scope of claims that do not require prior approval will also be expanded to cover all eligible expenses incurred on overseas market development trips and overseas investment study trips, and the following qualifying activities:
- Investment feasibility/due diligence studies;
- Master licensing and franchising;
- Market surveys/feasibility studies;
- Overseas business development; and
- Production of corporate brochures for overseas distribution.
Businesses can continue to apply to Enterprise Singapore or Singapore Tourism Board for expenses exceeding S$400,000 per YA or expenses incurred on overseas trade office and e-commerce campaigns.

Enhanced grant support for overseas market access

The Market Readiness Assistance grant (“MRA”) by Enterprise Singapore supports local SMEs in expanding overseas by defraying costs for market promotion, business development and market setup. From 1 April 2026, the MRA grant will be enhanced as follows:
- The support level will increase to up to 70% of eligible costs for local SMEs. This higher support will apply until 31 March 2029.
- The enhanced cap of S$100,000 per company per new market will be extended.
From the second half of 2026, the requirement for companies to be new to the target overseas market will be removed. Local enterprises will be able to receive support to deepen their presence in existing overseas markets.

Enterprise Innovation Scheme (“EIS”)

To encourage businesses to adopt AI and drive transformation in key sectors, the EIS will be enhanced for the YA 2027 and YA 2028. The enhancements include:
- Expanding the list of partner institutions to include the Sectoral AI Centre of Excellence for Manufacturing.
- Introducing a new qualifying activity for AI expenditure. Businesses can claim 400% tax deductions or allowances on up to S$50,000 of qualifying AI expenditure per YA.
The cash payout option to convert up to $100,000 of the total qualifying expenditure for each YA into cash at a conversion rate of 20% will not apply to this new AI qualifying activity.

Finance and Treasury Centre (“FTC”) incentive

The Finance and Treasury Centre incentive will be extended to 31 December 2031 to encourage companies to carry out treasury management activities in Singapore.
The withholding tax exemption for approved FTCs will be expanded to cover interest, like borrowing costs that are subject to withholding tax and where the loans support qualifying activities or services.
The expanded exemption applies to payments made on or after 13 February 2026.

Extension of withholding tax exemptions for the financial sector

To maintain the competitiveness of Singapore’s financial sector, the withholding tax exemptions for certain payments made to non-resident persons will be extended to 31 December 2031. These include:

Section 12(6) payments made by specified entities in the course of their trade or business
Payments on structured products offered by Singapore financial institutions
Payments on over-the-counter financial derivatives by qualifying financial institutions
Payments made under cross-currency swap transactions by Singapore swap counterparties to issuers of SGD debt securities
Interest payments on margin deposits under all derivatives contracts by approved exchanges, approved clearing houses and their respective members
Specified payments under securities lending or repurchase agreements by specified institutions
Payments made under interest rate or currency swap transactions by the Monetary Authority of Singapore.

Double Tax Deduction for rated retail bonds

The Double Tax Deduction scheme for qualifying upfront costs of rated retail bonds will lapse after 31 December 2026.
Other schemes, including the Qualifying Debt Securities scheme and the Global Asia Bond Grant scheme, will continue to be available to bond issuers.

Global Trader Programme (“GTP’)

GTP will be extended to 31 December 2031 to strengthen Singapore’s position as a global trading hub.
Qualifying commodities will be expanded to include Environmental Attribute Certificates, with effect from 13 February 2026.

CPF Cash Top-ups under the Voluntary Contributions to Medisave Account Scheme

Platform operators that make CPF cash top-ups under the Voluntary Contributions to Medisave Account scheme for eligible platform workers will be allowed a tax deduction for these contributions.
This change applies from the YA 2027 for CPF cash top-ups made from 1 January 2026.

Investment Allowance for the Emissions Reduction scheme

The Investment Allowance for Emissions Reduction scheme will lapse after 31 December 2026.

Not-for-Profit Organisation Tax Incentive

The Not-for-Profit Organisation Tax Incentive will be extended to 31 December 2032 to keep Singapore attractive to not-for-profit organisations.

Tax Deductions for Qualifying Donations to an Institution of a Public Character (“IPC”)

The IPC tax benefit of 250% tax deduction for qualifying donations made to IPCs and eligible institutions has been extended to 31 March 2029.

Corporate Volunteer Scheme

The 250% tax deduction under the Corporate Volunteer Scheme will be extended for qualifying expenditure incurred from 1 January 2027 to 31 December 2029.

Updating the foreign worker policies

The foreign worker policies will be refined to maintain a high-quality, complementary foreign workforce while supporting industry transformation and better jobs for locals. Below are the key updates:

The holders of an Employment Pass minimum salary and a S-Pass minimum salary will be raised as follows:

Sector	Current minimum qualifying salary		Revised minimum qualifying salary *
Sector	EP	S-Pass	EP	S-Pass
All sectors, except for Financial Services	S$5,600	S$3,300	S$6,000	S$3,600
Financial Services sector	S$6,200	S$3,800	S$6,600	S$4,000

EP = Employment Pass
[* Applicable to new applications from 1 January 2027 and to renewal applications from 1 January 2028]

The monthly Foreign Worker Levy (“FWL”) rates for work permit holders (Basic Skilled “R2”) in the Marine Shipyard and Process sectors will be revised to S$600 and S$800, depending on the nationality.
For the Services and Manufacturing sectors, the FWL framework for work permit holders will be simplified by merging the current Tier 1 and Tier 2 into a single tier. The monthly FWL rates for work permit holders (Tier 1) in the services and manufacturing sectors will be revised to S$400 and S$300, respectively, for higher-skilled (R1) and S$600 and S$470, respectively, for basic-skilled (R2).
The changes to the above FWL rates will be implemented from 2028. The Ministry of Manpower will release more details on the implementation timeline in due course.

Senior workers’ CPF contribution rates and CPF Transition Offset

The senior workers’ CPF contribution rates for workers aged above 55 to 65 will be increased with effect from 1 January 2027, as shown in the table below.

CPF contribution rates from 1 January 2027
Age band	Total	Employer	Employee
> 55 to 60	35.5% (+1.5%)	16.5% (+0.5%)	19% (+1%)
> 60 to 65	26% (+1.0%)	13% (+0.5%)	13% (+0.5%)

The increase in contribution rates will be fully allocated to the CPF Retirement Account to help senior workers save more for retirement. For members who have set aside the Full Retirement Sum, these contributions will be credited to the CPF Ordinary Account.
With this increase in 2027, the target contribution rates for senior workers aged 60 to 65 will be reached. To mitigate the rise in business costs due to this increase, the Government will provide employers with a one-year CPF Transition Offset equivalent to half of the 2027 increase in employer CPF contribution rates for every Singaporean and Singapore Permanent Resident employee aged above 55 to 65.

CPF Top-Up

The top up supports Singaporeans aged 50 and above in 2026 who have CPF savings below the 2026 Basic Retirement Sum of S$110,200, live in a property with an annual value of S$31,000 or below and own no more than one property as at 31 December 2025.