Singapore Budget 2025 Feedback

As Singapore celebrates its 60th year of independence (SG60) with the theme “Building Our Singapore Together,” Budget 2025 serves as a platform to solidify our vision for the future amidst evolving global challenges, Singapore’s upward revision of its 2024 growth forecast to approximately 3.5%, alongside a projected 1-3% growth range for 2025, reflects both our resilience and the uncertainties shaping the global economic landscape. This pivotal budget offers an opportunity to address pressing economic, social and environmental challenges, ensuring that Singapore remains adaptable and competitive whilst fostering inclusivity and sustainability. As we commemorate another milestone, we must remain steadfast in building a cohesive and prosperous nation for generations to come.

Domestically, the economy continues to face both promise and uncertainty. While recent GDP estimates indicate gradual growth, inflationary pressures and rising costs remain challenges for households and businesses. The impact of the recent GST increase, from 7% to 9%, is still felt across sectors, especially amidst inflationary pressures. Our feedback highlights the need for continued support for lower-income households and SMEs, ensuring a balanced approach as these changes are implemented. Additional targeted measures for businesses would aid a smooth transition, aligning fiscal sustainability with social equity.

E-invoicing is a vital part of Singapore’s digital transformation, and the government’s push for broader adoption reflects its commitment to enhancing productivity and compliance efficiency. Budget 2025 is likely to extend support for businesses, especially SMEs, in transitioning to e-invoicing, aligned with global moves towards digital trade and finance. This shift will reduce administrative burdens, increase transparency, and improve cash flow management.

R&D incentives remain key to fuelling Singapore’s innovation and economic adaptability. As technological advancements reshape industries, we recommend expanding R&D tax incentives to encourage businesses to invest in innovation. Enhanced R&D support would foster local talent development and attract global enterprises seeking a robust environment for growth. Strengthening these incentives positions Singapore as a hub for high-value innovation, creating pathways for long-term economic growth and competitiveness.

On the global front, 2025 marks Singapore’s implementation of the OECD’s Pillar Two Global Minimum Tax Rules, a significant moment in international tax reform. The new Multinational Enterprise (Minimum Tax) legislation will ensure Singapore’s tax system remains aligned with global standards, preserving its attractiveness as a hub for multinational enterprises. Our feedback underscores the importance of clear compliance guidelines and supportive measures to ease businesses’ transition, maintaining Singapore’s reputation as a competitive, business-friendly jurisdiction.

Climate and sustainability priorities continue to shape Singapore’s strategic direction under the Singapore Green Plan 2030. Budget 2025 can advance this agenda by expanding incentives for sustainable practices, encouraging investment in green technologies, and supporting emissions reduction. Strengthening Singapore’s green financing framework would further position the nation as a leader in sustainable development and create long-term economic opportunities in the green sector.

In terms of personal tax and immigration, Singapore’s policies must balance talent attraction with a commitment to social cohesion. While competitive personal tax rates are vital for attracting global talent, our feedback suggests adjustments to enhance Singapore’s appeal as a place to live and work. Immigration policies should support demographic needs while fostering integration, reinforcing Singapore’s position as an inclusive, vibrant society.

Our feedback report offers targeted recommendations on how Singapore can build on the successes of the last decade while addressing future challenges. We focus on labour force needs, supporting financial services innovation, enhancing GST e-invoicing adoption, and promoting sustainable growth. For detailed insights, please refer to the following sections.