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Singapore Budget 2025: Key Support Measures for Business Owners and SMEs

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Singapore’s Budget 2025 introduces a range of measures to support business owners and SMEs, addressing key pain points such as rising costs, cash flow challenges, and the need for international expansion. With a focus on financial relief, innovation, and growth, the government is rolling out several initiatives to help businesses thrive in a competitive global economy. Here’s a breakdown of the key categories of support that matter most to business owners:

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1. Financial Relief and Tax Support

Businesses are facing rising costs and cash flow challenges. Budget 2025 offers several forms of financial relief:

  • Corporate Income Tax (CIT) Rebate and Cash Grant:

    • Businesses will receive a 50% CIT rebate on their tax payable for the Year of Assessment (YA) 2025, with a minimum benefit of $2,000 in the form of a CIT Rebate Cash Grant.

    • The total maximum benefit (CIT Rebate + Cash Grant) is capped at $40,000 per company

    • Eligibility: Companies must have employed at least one local employee (Singapore Citizen or Permanent Resident) in 2024 and made CPF contributions for them.

    • Disbursement: Benefits will be automatically credited from Q2 2025.

  • Personal Income Tax (PIT) Rebate:

    • Business owners who are tax residents will receive a 60% PIT rebate for YA 2025, capped at $200 per taxpayer.

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2. Wage Support and Employee Upliftment

To help businesses manage wage increases and retain talent, the government is enhancing wage support schemes:

  • Progressive Wage Credit Scheme (PWCS) Enhancements:

    • The PWCS co-funding support for wage increases given in 2025 will be increased from 30% to 40%. For 2026, it will rise from 15% to 20%.

    • Eligibility: Employers must sustain the wage increase for at least two years. Wage increases must be for lower-wage workers earning up to 3,000beforetheincreaseandupto4,000 after the increase.

    • Disbursement: Payouts for 2025 wage increases will be made in Q1 2026, and for 2026 increases in Q1 2027.

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3. Internationalisation and Market Expansion

For businesses looking to expand overseas, Budget 2025 provides enhanced support:

  • Double Tax Deduction for Internationalisation (DTDi) Scheme Extension:

    • The DTDi scheme, which allows businesses to claim a 200% tax deduction on qualifying market expansion and investment development expenses, will be extended until 31 December 2030.

    • Eligibility: Businesses engaging in overseas market promotion, business development, and market set-up activities.

  • Market Readiness Assistance (MRA) Grant Extension:

    • The enhanced grant cap of $100,000 per new market under the MRA grant will be extended until 31 March 2026.

    • Eligibility: SMEs looking to expand into new overseas markets.

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4. Mergers and Acquisitions (M&A) Support

To encourage inorganic growth, the government is extending and enhancing M&A support:

  • Mergers and Acquisitions (M&A) Scheme Extension:

    • The M&A scheme, which provides tax benefits for qualifying acquisitions, will be extended until 31 December 2030.

    • Businesses can claim:

      • An M&A allowance of 25% of up to $40 million of the acquisition value.

      • A 200% tax deduction on transaction costs, capped at $100,000 per Year of Assessment.

    • Eligibility: Singapore companies making qualifying acquisitions of ordinary shares in another company.

  • Enterprise Financing Scheme (EFS) – Mergers and Acquisitions Loan Enhancements:

    • From 1 April 2025, the scope of the EFS – M&A Loan will be expanded to support targeted asset acquisitions, in addition to equity acquisitions.

    • Eligibility: Singapore enterprises pursuing inorganic growth opportunities.

5. Financing and Funding Support

To help businesses access capital and manage cash flow, Budget 2025 introduces several financing enhancements:

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6. Innovation and Technology Adoption

To help businesses stay competitive through innovation, Budget 2025 offers:

  • Enterprise Compute Initiative:

    • Up to $150 million will be set aside to help businesses harness AI effectively, providing access to cloud computing resources and expert consultancy services.

    • Eligibility: Enterprises needing AI solutions tailored to their business processes.

A Budget for Business Growth and Resilience

For business owners, this Budget offers not just financial relief but also opportunities to scale, innovate, and compete globally. As PM Wong aptly put it, this is a Budget for all Singaporeans, shaped by all Singaporeans, ensuring that no one is left behind.

Stay tuned to Financial Coconut for more insights on how Budget 2025 impacts your business.

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