Singapore Budget 2026: Staying Connected Globally, Integrating Regionally For Sustainability And Leveraging On AI To Remain Competitive

As the Year of the Horse Approaches, Prime Minister Lawrence Wong Unveils a Major Gift — Singapore’s 2026 Budget Is Officially Released!

Covering all 6.11 million residents across the island, this Budget lays out Singapore’s future development blueprint. This article breaks it down across four key pillars: Livelihood Support, Business Growth, Artificial Intelligence, and Workforce Resilience.

1. Livelihood Support: Benefits for Every Household, Young and Old

Cost-of-Living Special Payment – Up to S$400

In 2026, eligible Singaporeans aged 21 and above will receive a one-off Cost-of-Living Special Payment of S$200 to S$400.

The payout is tiered based on assessable income and annual property value, with lower-income households receiving the highest support of S$400.

S$500 CDC Vouchers for Every Household

From January 2027, all Singaporean households will receive S$500 in CDC vouchers, valid until end-2027, supporting spending at heartland merchants.

U-Save Rebates – Up to S$570 for HDB Households

Eligible HDB households will receive S$330 to S$570 in utilities rebates, disbursed quarterly throughout the year.

Additional Child Support – S$500 Child LifeSG Credits

In July, children aged 12 and below will receive a one-off S$500 Child LifeSG Credit, usable at PayNow or NETS QR merchants.

CPF Top-Ups for Seniors – Up to S$1,500

Singaporeans aged 50 and above who have not met the Basic Retirement Sum will receive up to S$1,500 in CPF top-ups, strengthening retirement adequacy.

Tobacco Tax Raised by 20%

Effective immediately, excise duties on all tobacco products will increase by 20% to promote public health and fiscal sustainability.

2. Business Support: Tax Relief, Financing & Internationalisation

40% Corporate Income Tax Rebate – Up to S$30,000

For YA2026, active companies employing at least one local employee will receive a 40% corporate tax rebate, capped at S$30,000, with a minimum benefit of S$1,500.

Enhanced Internationalisation Support – Up to 70%

Eligible SMEs can receive up to 70% support for overseas market expansion costs (non-SMEs up to 50%). The scheme is extended until March 2029.

Capital Markets & Innovation Funding

• A second S$1.5 billion Anchor Fund, in partnership with Temasek, to attract high-growth companies to list in Singapore.

• S$1 billion allocated to expand the Startup SG Equity scheme.

• An additional S$1.5 billion injected into the Financial Sector Development Fund to strengthen capital market development.

Green Loans & Energy Efficiency Grants Extended

• Enterprise Financing Scheme – Green extended to 2031.

• Energy Efficiency Grant extended to March 2027.

3. Artificial Intelligence: National Strategy, Business Transformation, AI for All

National AI Council Established

Singapore will establish a National AI Council, chaired by Prime Minister Lawrence Wong, to drive AI adoption in advanced manufacturing, logistics, finance, and healthcare.

“Champions of AI” Programme

A new initiative to help companies deploy AI comprehensively, providing employee training and technology implementation support.

400% Tax Deduction for AI Expenditure

For YA2027–YA2028, AI-related expenditure will qualify under the Innovation Scheme, capped at S$50,000 annually, with 400% tax deductions.

AI Skills for All

Singaporeans enrolled in designated AI courses will receive six months of complimentary access to premium AI tools (such as ChatGPT and Gemini), alongside an enhanced SkillsFuture platform for improved course matching.

4. Strengthening Skills, Safeguarding Jobs, Building a Resilient Workforce

Foreign Manpower Thresholds Raised

From January 2027:

• Employment Pass (EP) minimum salary increased to S$6,000 (S$6,600 for financial services).

• S Pass minimum salary increased to S$3,600 (S$4,000 for financial services).

• Existing pass holders must meet new thresholds upon renewal from 2028.

• Foreign worker levy in marine shipyard and manufacturing sectors to rise from 2028, up to S$800.

Wage Growth for Lower-Income Local Workers

From July 2026:

• Local Qualifying Salary (LQS) raised from S$1,600 to S$1,800.

• Progressive Wage Credit Scheme (PWCS) extended to 2028:

  • Government co-funding: 30% (2026–2027), 20% (2028).

• Minimum qualifying wage increase raised from S$100 to S$200.

SkillsFuture Revamp & Lifelong Learning

• SkillsFuture to be enhanced through the integration of SkillsFuture Singapore and Workforce Singapore into a new statutory board.

• Expanded SkillsFuture Level-Up Programme.

• Redesigned MySkillsFuture portal for better job-training alignment.

Stronger Support for Senior Workers

• Senior Employment Credit extended to end-2027.

• CPF contribution rates for workers aged 55–65 to increase from 2027, with transitional government support for employers.

• Encouragement for inclusive workplace redesign to foster multi-generational workforces.

5. Fiscal Outlook: Prudent Yet Forward-Looking

• FY2025 projected surplus: S$15.1 billion (1.9% of GDP)

• FY2026 projected surplus: S$8.5 billion (1% of GDP)

With the implementation of BEPS Pillar Two, effective tax rates for multinational enterprises will rise to 15% from 2027, supporting steady corporate tax revenue growth.

Prime Minister Lawrence Wong stated: