On 12 February 2026, Singapore’s Ministry of Finance delivered the national Budget for the fiscal year ahead under the theme “Secure Our Future Together in a Changed World.” The Budget sets out Singapore’s economic priorities for the coming years, focusing on maintaining fiscal prudence while investing strategically in innovation, workforce development, and international connectivity.
Against a backdrop of global uncertainty and shifting economic dynamics, the 2026 Budget aims to strengthen Singapore’s long-term competitiveness while continuing to support businesses and households.
The 2026 Budget builds on Singapore’s strong economic performance in 2025. The country recorded GDP growth of 4.8%, outperforming earlier forecasts and marking one of its strongest growth years since 2021. Growth was driven primarily by manufacturing, wholesale trade, finance and insurance, and transport-related sectors. In particular, a surge in biomedical manufacturing and demand for semiconductors linked to artificial intelligence supported strong growth in the final quarter of the year.
Despite these positive results, global conditions remain uncertain. Trade tensions, geopolitical risks, and shifting global economic alliances continue to influence international trade flows. As an export-oriented economy, Singapore must remain adaptable to these developments. Reflecting cautious optimism, the Ministry of Trade and Industry has revised Singapore’s GDP growth forecast for 2026 to between 2% and 4%, signalling steady but moderate expansion in the year ahead.
A key component of the 2026 Budget focuses on helping businesses manage operational costs while continuing to invest in growth and transformation.
One of the headline measures is a 40% Corporate Income Tax rebate, capped at SGD 30,000 per company. To ensure that smaller businesses also benefit, a minimum benefit of SGD 1,500 will be provided to active companies that employed at least one local worker in 2025. These measures are designed to provide immediate financial relief and allow companies to retain more earnings for reinvestment and operational needs.
In addition, the Progressive Wage Scheme (PWS) will see increased government funding support. The scheme will cover 30% of wage increases, up from the previously announced 20%, and will be extended for an additional two years. The minimum wage increase required to qualify for the scheme will also rise from SGD 100 to SGD 200, further encouraging businesses to improve wages for lower-income workers while maintaining productivity growth.
Another priority in the 2026 Budget is to deepen Singapore’s global economic integration in a more complex and selective global trading environment.
The government emphasised that globalisation is evolving, with economic flows increasingly shaped by strategic partnerships and supply chain resilience. In response, Singapore plans to strengthen international cooperation through initiatives such as the Future of Investment and Trade Partnerships, aimed at facilitating collaboration in technology, trade facilitation, and supply chain resilience.
Singapore is also expanding its engagement with emerging markets in Latin America, Africa, and the Middle East, while continuing to strengthen regional integration through initiatives such as the Johor-Singapore Special Economic Zone and economic collaboration projects in Indonesia, including Batam and Bintan.
To support Singapore-based companies expanding internationally, several financing and grant schemes will be enhanced. The Market Readiness Assistance (MRA) Grant will continue to support overseas expansion activities, while the Double Tax Deduction for Internationalisation (DTDi) scheme will allow companies to claim 200% tax deductions on qualifying expenses related to international expansion. The cap on automatic DTDi claims will increase from SGD 150,000 to SGD 400,000, with the scheme extended until 31 December 2030.
Furthermore, the Enterprise Financing Scheme (EFS) will be enhanced to increase loan limits for companies at different stages of growth, and an additional SGD 1 billion will be allocated to the Startup SG Equity programme to support high-growth companies.
A defining feature of the 2026 Budget is the strong emphasis on innovation and artificial intelligence as drivers of long-term economic growth.
Under the Research, Innovation and Enterprise 2030 (RIE2030) plan, the government will invest SGD 37 billion to expand research capabilities, strengthen talent pipelines, and accelerate the translation of research into commercial applications. The programme will focus on key sectors including advanced manufacturing, trade and connectivity, healthcare and healthy longevity, urban sustainability, and the digital economy.
In addition, Singapore will launch National AI Missions to accelerate the adoption of AI across sectors such as manufacturing, logistics, finance, and healthcare. A new National AI Council will oversee governance and regulatory frameworks, while an AI park at One-North will support collaboration between companies, researchers, and technology developers.
To encourage businesses to adopt AI technologies, the Enterprise Innovation Scheme will allow 400% tax deductions for qualifying AI-related expenditures, capped at SGD 50,000 per year of assessment for YA 2027 and YA 2028.
Workforce development remains a central pillar of the 2026 Budget. The government aims to strengthen local skills while maintaining access to global talent.
One measure includes raising the Local Qualifying Salary (LQS) from SGD 1,600 to SGD 1,800, increasing the minimum salary that firms must pay local employees if they hire foreign workers.
The government will also merge SkillsFuture Singapore and Workforce Singapore into a new statutory board, creating a single platform that provides training, career guidance, and job-matching services. Programmes such as the SkillsFuture Level-Up Programme will continue to support mid-career workers aged 40 and above through training allowances and reskilling opportunities.
At the same time, Singapore will adjust foreign workforce policies to ensure that global talent complements the local workforce. For example, the qualifying salary for Employment Pass applications will increase to SGD 6,000 (and SGD 6,600 for financial services roles) starting in January 2027, while S-Pass salary thresholds will also rise.
Overall, Singapore’s 2026 Budget reflects a balanced strategy that combines immediate support with long-term investments in innovation, skills development, and global engagement. By strengthening its economic foundations while adapting to global changes, Singapore aims to remain competitive and resilient in the years ahead.
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