SINGAPORE, Feb 18 — Companies in Singapore will benefit from a 50 per cent corporate income tax rebate for the 2025 year of assessment, Prime Minister and Finance Minister Lawrence Wong announced in his Budget 2025 speech on Tuesday.

Wong acknowledged the rising costs affecting businesses, particularly in terms of rent and labour, stating, “Higher prices... affect our businesses, many of whom are grappling with the higher cost of rent and labour.”

Under this measure, eligible firms will receive a cash grant of S$2,000 (RM6,630), regardless of profitability, according to a report published on Channel News Asia.

To qualify, companies must have been active in 2024 and employed at least one local worker.

The combined total benefit, including both the cash grant and tax rebate, will be capped at S$40,000 per company.

The Ministry of Finance confirmed that eligible businesses will receive the funds automatically starting in the second quarter of 2025.

Increase in government co-funding for wage growth

Wong also announced an increase in government support for businesses that raise wages for lower-wage workers.

He expressed appreciation for the commitment shown by many businesses to uplift the wages of these workers despite higher cost pressures.

“Despite facing higher cost pressures, I’m glad that many businesses remain committed to uplifting the wages of lower-wage workers,” he said. “The government will continue to share this responsibility with employers.”

Under the Progressive Wage Credit scheme introduced in 2022, the government covers a portion of wage increases given by employers to workers earning up to S$4,000 a month.

For 2025, the government will raise its co-funding share to 40 per cent, up from 30 per cent this year.

This will decrease to 20 per cent in 2026.

In 2024, the co-funding rate was 50 per cent.

This scheme applies to workers who earned S$3,000 or less per month before the wage increase and S$4,000 or less after the increase, with a minimum annual wage increase of S$100.

If the wage increase is sustained in subsequent years, the government will continue to co-fund the increase for both years.