Singapore’s 2024 Budget statement on 16 February 2024 contained a suite of support measures to help businesses tackle cost concerns, and initiatives to ensure a strong, innovative and vibrant economy.
During the subsequent Committee of Supply sessions that wrapped up in early March, the government provided more details on how ministries and agencies will sustain economic growth, while helping businesses and workers address challenges, enhance their capabilities and seize new growth opportunities.
Here’s a recap of the key measures and initiatives.
1. S$1.3 billion Enterprise Support Package
Qualifying businesses in Singapore will get help to manage rising costs in three ways. They will need to meet specific guidelines such as equity held by Singaporeans and/or Singaporean Permanent Residents, among other things.
Companies will receive a Corporate Income Tax (CIT) rebate of 50 per cent, capped at S$40,000, for 2024. For companies that are not profitable, minimum cash payouts of S$2,000 will be disbursed to businesses with at least one local employee in 2023.
The Enterprise Financing Scheme will also be enhanced to help Singapore companies with their financing needs in seven areas like green growth projects, fixed assets loans, and venture debt loans.
The SkillsFuture Enterprise Credit (SFEC) will be extended by a year to 30 June 2025 to give companies more time to embark on enterprise and workforce transformation. Qualifying companies can expect to receive a one-off credit of S$10,000 which supports up to 90 per cent of out-of-pocket expenses. All eligible employers have been notified.
2. Enhanced Partnerships for Capability Transformation (PACT) scheme
Launched in 2010, PACT has been used to help defray costs borne by Original Equipment Manufacturers (OEMs) and their suppliers—such as on equipment, materials, testing and professional services—to validate that suppliers’ procedures comply with the OEM’s requirements. PACT also provides wage support for managers hired by OEMs to undertake supplier identification, procurement and setting up of manufacturing/quality systems.
About S$150 million has gone towards PACT since then, benefiting more than 2,500 Singapore-based firms.
PACT will be enhanced to support more collaborations between larger companies such as MNCs and Large Local Enterprises (LLEs) and Small and Medium Enterprises (SMEs). The scheme will cover an expanded range of industry segments and modes of partnership, such as activities in capability training, internationalisation and corporate venturing, among others.
3. *New* Refundable Investment Credit
Singapore will implement the Income Inclusion Rule and a Domestic Top-up Tax under Pillar Two of Base Erosion and Profit Shifting (BEPS) 2.0 starting on or after 1 January 2025.
To enhance Singapore’s attractiveness for investments, a new Refundable Investment Credit (RIC) will be introduced to support a broad range of projects that bring substantive economic activities to Singapore – from new productive capacity to headquarters and services, R&D and innovation and decarbonisation. RIC can be awarded to support up to 50 per cent of various qualifying costs, subject to an overall cap.
The credits will be offset against Corporate Income Tax payable. Any unutilised credit will be refunded in cash within four years from when the company satisfies the conditions for receiving credits.
EDB and Enterprise SG will administer the RIC and provide more details by 3Q2024.
4. Other tax highlights
To ensure that our tax incentives remain relevant and competitive, Singapore will introduce an additional concessionary tax rate (CTR) tier of 10 per cent for the following schemes:
- Finance and Treasury Centre Incentive
- Aircraft Leasing Scheme
An additional CTR tier of 15 per cent will also be introduced for the following schemes:
- Development and Expansion Incentive
- Intellectual Property Development Incentive
- Global Trader Programme
More details will be provided by EDB and EnterpriseSG in 2Q2024.
Learn more about the tax changes for businesses and individuals >>
5. S$3 billion for AI and finance
Singapore is investing S$1 billion to accelerate AI development and adoption in the next five years. Up to S$500m will go towards strengthening AI infrastructure to support the wave of AI adoption. This includes securing advanced computer chips needed to power AI innovation in both the private and public sectors such as transport, logistics, healthcare and financial services.
For talent development:
- There will be a new AI Accelerated Masters Programme to build a pipeline of Singaporean research talent and students who are keen on AI research roles or to pursue doctorate programmes.
- IMDA’s SG Digital Scholarship will support more Singaporean students in pursuing AI and related undergraduate, Master’s and PhD courses in universities.
- The TechSkills Accelerator will be scaled up for fresh and mid-career workers keen on AI. IMDA will also expand company-led training for locals in AI. IMDA is targeting to reskill about 18,000 tech professionals in AI and Analytics with an emphasis on GenAI, Software Engineering, Cloud and Mobility.
