Singapore Budget 2025 Digest

Together makes progress. This is the driving force behind our Budget 2025
Digest and a principle that has underpinned Singapore’s success. As we mark
SG60—Singapore’s Diamond Jubilee, this milestone is not just a reflection of how far we have come but a reaffirmation of what propels us forward: collaboration, adaptability, and a shared commitment to progress.

The Budget 2025 Speech, titled “Onward Together for a Better Tomorrow” and
delivered in Parliament by our Prime Minister and Finance Minister Lawrence
Wong, builds upon the Forward Singapore exercise, reinforcing the importance
of a renewed social compact. As Singapore navigates economic and geopolitical complexities, progress will not be defined by individual resilience alone but by how we work together as a nation—businesses, workers, and policymakers—to shape the next era of growth.

The past year has seen Singapore’s economy grow by 4.4%, supported by a
recovery in global trade, sustained private sector investment, and resilience in
key industries such as financial services, high-value manufacturing, and digital
transformation. However, the external environment remains highly complex. The US-China strategic competition continues to reshape global trade flows, investment patterns, and supply chain networks. The US presidential election in 2024 has introduced policy uncertainties, with potential shifts in trade and industrial strategies that may affect global markets. Protectionist policies in key economies, evolving industrial subsidies, and stricter tax compliance requirements add to the challenges facing international businesses.

At the same time, ASEAN economies are accelerating their digitalisation and
sustainability efforts, deepening regional trade integration and creating new
opportunities for cross-border investments. Closer to home, Singapore remains
focused on strengthening its position as a hub for finance, innovation, and
enterprise, ensuring it remains well-positioned to adapt to evolving global
dynamics. While inflationary pressures have eased, risks remain from energy
supply disruptions and geopolitical tensions. Amid these uncertainties, Singapore’s economy is projected to expand between 1.0% and 3.0% in 2025, supported by its deep economic fundamentals, strong governance, and sustained investments in future growth sectors.

Budget 2025 introduces a balanced approach to supporting businesses and
workers while ensuring long-term economic resilience. Singapore’s tax landscape continues to evolve in response to international developments, with refinements ensuring that Singapore remains attractive to global investors while safeguarding its taxing rights. A 50% CIT Rebate, capped at $40,000 per company, has been introduced to help businesses manage costs while maintaining competitiveness. Strategic investments in digitalisation, artificial intelligence, and sustainabilityfocused industries reinforce Singapore’s position as a hub for high-value economic activity. A refreshed approach to enterprise transformation and workforce development ensures that businesses remain agile and that workers are equipped for the jobs of tomorrow.

Beyond fostering economic resilience, Budget 2025 strengthens social and workforce policies to ensure that growth remains inclusive. The SkillsFuture initiative has been expanded, providing additional support for mid-career workers to reskill and transition into emerging industries. The Progressive Wage Credit Scheme has been enhanced, encouraging businesses to uplift lower-income workers while ensuring continued productivity gains. These workforce transformation efforts align with Singapore’s vision of a
competitive yet inclusive economy, where businesses and employees thrive together.

Recognising the importance of Singapore’s status as a global financial hub, Budget 2025 introduces enhanced tax incentives for fund managers to attract new listings and increase investment demand for Singapore-listed equities. These measures strengthen Singapore’s capital markets, reinforcing its
position as a preferred jurisdiction for asset management.

To support businesses in navigating the evolving global tax environment, Budget 2025 introduces refinements to key tax incentive schemes, extending targeted tax benefits for strategic industries while ensuring compliance with international standards. These enhancements, alongside continued investments in R&D and innovation, provide strong incentives for businesses to invest in cutting-edge research, intellectual property development, and high-value manufacturing. The introduction of new tax deductions for collaborative innovation activities encourages enterprises to deepen their R&D capabilities while maintaining Singapore’s competitiveness as a hub for scientific and technological advancement.

A thriving economy and an adaptable workforce must be supported by robust infrastructure and sustainability initiatives. Budget 2025 provides for sustained investments in transport, energy resilience, and digital connectivity, ensuring that Singapore remains a leading global hub for trade and innovation. The expansion of sustainability-focused incentives reflects the Government’s commitment to longterm environmental resilience, with new investments in clean energy, green financing, and emerging technologies. These measures position Singapore to lead in the global transition towards sustainability,
reinforcing its role as a key player in the green economy.

As Singapore celebrates her 60th year of independence, Budget 2025 serves as its Diamond Jubilee Budget—a testament to the nation’s ability to adapt, evolve, and move forward together. Just as diamonds are forged under immense pressure, Singapore’s success has been built on resilience, foresight, and collective effort.

Our theme for this year, “Together makes progress,” reflects a fundamental truth in Singapore’s growth story: no achievement is made in isolation. Whether in navigating economic transitions, strengthening businesses, or ensuring social mobility, Singapore’s progress has always been a shared endeavour— between individuals, enterprises, and the Government. Budget 2025 is a blueprint for the next phase of transformation, reinforcing Singapore’s role as a global leader in innovation, finance, and enterprise, while ensuring that prosperity continues to be widely shared.

In this Digest, we examine the key announcements from Budget 2025, providing insights into how they may impact businesses, investments, and individuals in the year ahead. As Singapore steps into the next phase of its development beyond SG60, this Budget serves as a blueprint for resilience, progress, and shared success.

Wishing you an insightful and engaging read!