Singapore’s economic outlook

• Despite fears, Trump’s Liberation Tariffs did not trigger a sharp global slowdown

• Global resilience and Singapore’s economic strength led to a 5 per cent growth in 2025.

• For 2026,  growth is projected at 2 per cent to 4 per cent. Inflation is expected to be between 1 per cent and 2 per cent.

• Over the next decade, economic growth is targeted at the higher end of the 2 per cent to 3 per cent. This is expected to be accomplished via forging of new partnerships, increased engagement with fast-growing markets, and deepening regional cooperation.

Government surplus

• The Government is expected to end FY2025 with a surplus of S$15.1 billion – 1.9 per cent of its GDP.

• However, for FY2026, a smaller surplus of S$8.5 billion, or 1 per cent of Singapore’s GDP is expected.

Support for businesses and enterprises

• All companies will enjoy a 40 per cent income tax rebate for YA2026. The rebate ranges from S$1,500 to S$30,000, and will be given to all companies that employed at least one local employee in 2025.

• Under the double tax deduction for internationalisation scheme, companies will immediately enjoy a 200 per cent tax deduction for selected qualifying activities that are capped at $150,000.  More qualifying activities will be added, with the tax relief cap raised to S$400,000 over time.

• To strengthen Singapore’s enterprise ecosystem, S$1 billion will be set aside to enhance the StartupSG Equity Scheme and expand its scope to cover growth-stage companies.

• The Anchor Fund will receive a second tranche amounting to S$1.5 billion to continue attracting and anchoring high-quality public listings. This will continue to be a joint investment between the Government and Temasek Holdings.

• The broader equities sector will also be given a boost. The Financial Sector Development Fund will receive a S$1.5 billion top-up. This is expected to further develop the Republic’s fund management industry and increase investor participation in its equities.

• The Enterprise Innovation Scheme will be expanded to include AI expenditures as a qualifying activity for 2027 and 2028 years of assessment, capped at $50,000 per year of assessment.

Support for families and households

• A Cost-of-Living Special Payment will be given to eligible Singaporeans with under S$100,000 assessable income and who do not own more than one property. These payouts will range from S$200 to S$400.

• All households will receive S$500 CDC vouchers in January 2027.

• U-Save vouchers will continue to be provided in FY2026. Eligible households will receive up to S$570 in rebate, equivalent to 1.5 times the regular amount of U-Save rebates.

• To help parents defray day-to-day costs, the Government will provide another S$500 in Child LifeSG credits to families for each Singaporean child aged 12 and below.

• Pre-school subsidies and student care fee assistance have had their monthly income caps raised. This is expected to benefit 60,000 more families. The monthly household income cap has been raised to S$15,000 for pre-school subsidies, and S$6,500 for Student Care Fee Assistance.

Workforce and career

• Singaporeans taking up qualifying AI courses will be provided with 6 month’s access to premium AI tools to encourage hands-on learning and experimentation.

• The minimum salary for full-time work for local workers will be raised from S$1,600 to S$1,800 in 2026. To help businesses defray cost increases from this initiative, the Progressive Wage Credit Scheme co-funding support will be raised from 20 per cent to 30 per cent.

• The Senior Employment Credit will be extended to end-2027.

Economic development initiatives

• To further strengthen leadership in key industry clusters such as semiconductors, aerospace and medical sciences, Singapore will set aside S$37 billion under the Research, Innovation and Enterprise, or RIE 2030 plan.

• AI is another significant sector of development, and the Government is working on several initiatives to ensure Singaporeans do not have to navigate the fast-changing landscape alone.

Income tax and CPF

• Tax deductions for qualifying donations will be extended till end-2029. The tax relief rate will remain at 250 per cent.

• A new CPF Investment Scheme will be implemented to allow CPF members to potentially earn higher returns than existing rates.

• A CPF top-up of up to $1,500 will be given to Singaporeans aged 50 and above, and with CPF retirement savings below the Basic Retirement Sum. Those with lower balances will receive larger top-ups.

Sustainability and eco-friendliness

• To enhance EV adoption in Singapore, the Additional Registration Fee for electric vehicles will be reduced by 45 percentage points, and the cap reduced from $60,000 to $30,000.

Tobacco

• There will be a 20 per cent increase in tobacco tax starting 12 Feb 2026.