Singapore
Budget 2025: PM Wong announces 50% corporate tax rebate, boost to Progressive Wage Scheme
During the 2025 Budget Statement on 18 February, PM and Finance Minister Lawrence Wong introduced key measures to aid businesses grappling with higher costs. These include a 50% corporate tax rebate for 2025, capped at S$40,000, and a boost to the Progressive Wage Credit Scheme, raising co-funding for wage increases to 40% in 2025 and 20% in 2026.
SINGAPORE: In his presentation of Singapore’s 2025 Budget Statement on 18 February, Prime Minister and Finance Minister Lawrence Wong unveiled significant measures aimed at supporting businesses and lower-wage workers amidst rising costs.
One of the key announcements was an increase in the co-funding levels for the Progressive Wage Credit Scheme (PWCS), a programme designed to support wage increases for lower-wage workers.
The government will now co-fund 40% of wage increases in 2025, up from the previously planned 30%, and 20% in 2026, increased from 15%.
This move is part of Singapore’s broader efforts to raise the earnings of lower-income workers, which will directly benefit businesses that participate in the scheme.
PM Wong also acknowledged the mounting pressures on businesses due to rising costs, including higher rents and labour expenses.
In response, he introduced a 50% corporate income tax rebate for the year of assessment 2025.
This rebate, which is capped at S$40,000, aims to provide businesses with much-needed relief as they navigate the challenges of structurally higher costs.
For non-profitable companies that may not be able to benefit from the tax rebate, the government has ensured a minimum benefit of S$2,000 for every active company that employed at least one local employee in 2024.
The maximum benefit for these companies is capped at S$40,000 per company.
