Singaporean businesses stand to benefit from a suite of financial relief measures in the upcoming fiscal year, according to Prime Minister Lawrence Wong in his Budget 2025 speech on 18 February.

To help firms navigate rising operational costs, the government is introducing a 50% corporate income tax rebate for the 2025 year of assessment.

Acknowledging the financial strain on businesses, Wong unveiled the measure for businesses, “many of whom are grappling with the higher cost of rent and labour”.

The tax relief is complemented by a one-time cash grant of S$2,000 (US$1,500) for eligible businesses, regardless of their profitability. To qualify, companies must be active and have employed at least one local worker in 2024.

The combined benefit incorporating both the rebate and cash grant is at a maximum of S$40,000 per company.

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Strengthening wage support for lower-income workers

Beyond tax incentives, the government is reinforcing its commitment to wage growth for lower-income employees. “The government will continue to share this responsibility with employers,” Wong said.

The prime minister also praised businesses for their dedication to fair wages despite cost pressures.

The Progressive Wage Credit Scheme, first introduced in 2022, is designed to co-fund salary increases for lower-wage employees.

For 2025, the co-funding rate will rise to 40%, up from 30%, with a further increase to 20% in 2026. Last year, the government provided a more generous 50% co-funding level.

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The support applies to employees whose average gross monthly wages were S$3,000 or below before the wage adjustment and up to S$4,000 after the increase.

To qualify, the salary boost must be at least S$100 annually.

Moreover, if an employer maintains the pay rise for two consecutive years, the government will co-fund both years, reinforcing sustainable wage progression.