Singapore Budget 2024 – Building Our Shared Future Together

Talent and upskilling

While the Singapore workforce ranks highly in terms of skill and technical proficiency, more is needed to manage digital and technological advancements, which will have an impact on the way expertise is defined and how value is created.

• The SkillsFuture Enterprise Credit will be extended by a year to June 30, 2025, for eligible employers to cover out-of-pocket expenses in the areas of workforce and business transformation.
• All Singaporeans aged 40 and above will receive a SkillsFuture top up of $4000 from May 2024 to be used for selected training programmes with better employability outcomes. This includes part-time and full-time diplomas, post-diplomas, undergraduate programmes, and ProgressiveWage Model sector courses.
• A monthly training allowance will also be provided for the those from this group who enrol inselected full-time courses equivalent to 50% of the individual’s average income, capped at$3,000 per month, with a lifetime allowance of up to 24 months.
• A new temporary financial support scheme will be introduced to support workers who have become involuntarily unemployed while they undergo training or look for better-fitting jobs, and more details will be announced later in 2024.

Taxation

Corporate tax rebate

• As part of the Enterprise Support package, companies will receive a 50% corporate tax rebate capped at $40,000 in the year of assessment for 2024.
• The government will make significant adjustments to Singapore's tax system to take into consideration the international Base Erosion and Profit Shifting (BEPS) 2.0 initiative.
• The initiative aims to reallocate taxing rights on profits to market jurisdictions while also introducing a global minimum effective tax rate of 15% for large multinational enterprise(MNE) groups.
• Non-profitable companies will also be covered with a minimum cash payout of $2,000 in cashfor those that employed at least one Singaporean employee in 2023.
• The maximum working capital loan quantum will also be permanently raised to $500,000 to help Singapore enterprises’ financing needs.
• Domestic construction projects will be supported, with the government’s risk-sharing of project loans extended to March 31, 2025.

Introduction of new investment tax credit

• The Singapore government will also roll out new investment tax credit with a refundable cash feature for companies to support R&D, setting up of manufacturing facilities as well as green transition activities.
  • This new tax credit will help Singapore stay competitive in attracting investments from global companies.
  • The National Productivity Fund will also receive a $2 billion top-up to support investment promotion.

Property tax

• AV bands of owner-occupier residential property tax rates will be raised from Jan 1, 2025
• Retirees living in higher-end residential homes who face cash flow issues paying property taxbills will be offered a 24-month interest free instalment plan.
• The additional buyer’s stamp duty (ABSD) concession for Singaporean married couples will be extended to single Singapore citizens aged 55 and above.

Personal income tax rebate

• There will be a 50% personal income tax rebate for 2024, capped at $200.
• The income threshold for taxpayers who claim dependant-related reliefs will be raised to$8,000 from $4,000, with effect from the year of assessment 2025.

Support for businesses

Helping local businesses to level up

• The current Partnerships for Capability Transformation (PACT) scheme will be enhanced to support collaborations between larger companies and SMEs in supplier development and co-innovation, particularly capability training, internationalisation and corporate venturing.

Defraying rising business costs

• To help employers cope with rising business costs, the co-funding levels for the Progressive Wage Credit scheme (PWCS) will be raised from a maximum of 30%, to a maximum of 50%.
• In 2025, the scheme’s wage ceiling will also be raised from $2,500 to $3,000, in tandem with the increase in the qualifying income cap for workfare. The PWCS fund will be topped up by$1 billion to provide for these enhancements.
• CPF Transition Offset will be provided to employers for another year to cover half of the increase in employer contributions for 2025. This will help to cushion the impact on business costs.

Extending Singapore’s lead in the financial sector
With an influx of interest from major financial institutions keen to operate in Singapore, attracting an inflow of investments, capital, and talent will be key.

• A 2 billion top-up for the Financial Sector Development Fund for the Monetary Authority of Singapore (MAS) to extend Singapore’s lead in the space.
• Core areas of banking, capital markets and asset management will be targeted, but newer areas such as FinTech and green finance will also be covered.

Research & Development (R&D)

• A further S$3 billion set aside for R&D in the Research, Innovation and Enterprise 2025(RIE2025) plan. The plan was launched in 2020 with an initial commitment of S$25 billion.

Technology, Artificial Intelligence (AI) and cybersecurity

Artificial Intelligence (AI)

• Singapore aims to go further in the field of Artificial Intelligence (AI) through the National AIStrategy 2.0, which will receive and investment of $1 billion over the next five years.
• The investment will ensure that Singapore can secure its access to advanced chips that are key to AI development and deployment.
• The government will also work with leading organisations in the space to set up AI centres ofexcellence to spur innovation and further catalyse AI activities in talent and industrydevelopment.
• Singapore will also upgrade the National Broadband Network to make broadband speeds 10 times faster than those in most homes today in order to provide the infrastructure needed to support technologies such as AI and immersive media.

Cybersecurity

• As cyber threats become increasingly common, a new National Cybersecurity Command Centre will be established, with the aim of improving Singapore’s capabilities to defend against such threats.

Sustainability and clean energy

Incentives for green efforts

• Existing schemes for small and medium enterprises (SMEs) will be enhanced to encourage more partnerships with larger companies, the adoption of green solutions and the cutting of emissions.
• The government will thus extend the enhanced support for green loans under the EnterpriseFinancing scheme and expand its scope to help more SMEs adopt green solutions.
• The Energy Efficiency Grant (EEG) will also be extended to more sectors, including manufacturing, construction, maritime, and data centres and their users.
  • The EEG will be enhanced to provide two tiers of support: a base tier for pre-approved energy-efficient equipment up to a S$30,000 cap, and an advanced tier tosupport companies that wish to make larger investments to drive energy efficiency.
  • Existing grant schemes for the adoption of energy-efficient equipment will be gradually streamlined and subsumed under EEG.
  • Companies registered and operating in Singapore with at least 30% local shareholding, at least one local employee and a group annual sales turnover of no more than S$500 million will be eligible for support under EEG.
  • The other sectors will be progressively onboarded, and companies in all EEG-supported sectors will be able to apply for the grant through the Business Grant Portal by the end of 2024.

Supporting the transition to clean energy

• Singapore is looking to build a second liquefied natural gas terminal, but the government acknowledges that solely relying on natural gas will not achieve the country’s net-zero emissions goals.
• While alternative options are being explored by the government, including hydrogen and eventhe possibility of nuclear energy in the future, it will require significant effort and costs to gofrom a system fully dependent on natural gas to one that is powered by clean energy.
• To prepare for the transition, Singapore will set up a Future Energy Fund, with the government contributing $5 billion at its onset to support investments in new energy initiatives.
• The Future Energy Fund will put Singapore in a position to move quickly on critical infrastructure and enhance the country’s security in clean energy.
  • For example, to import low-carbon electricity, Singapore must invest in submarine cables and upgrade its power grid. Such costly investments require catalytic funding from the government and cannot be funded by the private sector alone.

Healthcare

Managing healthcare costs

• With a rapidly ageing population, the fiscal pressures of healthcare will only grow, and the Singapore government has continually supported developments in the healthcare landscape, including developments in preventative medicine that are especially critical for seniors.
• The government is thus pre-funding rising healthcare expenditure by increasing the GST now, to keep healthcare affordable for all in the future as the fiscal pressures of healthcare grow.

MediSave bonus

• All Singaporeans aged 21 to 50 will be given a one-time MediSave Bonus of up to $300. This will benefit nearly 1.4 million Singaporeans, helping them cover their smaller medical bills and insurance premiums.
• Coupled with the Majulah Package for older cohorts, which will see the government providing a one-time MediSave Bonus to those born in 1973 or earlier, the government will collectively provide a MediSave Bonus for about 3 million Singaporeans in 2024.

Updated threshold for healthcare and social support subsidy schemes

• The per capita household income thresholds for Singapore’s healthcare and associated social support subsidy schemes will be updated.
• This includes schemes such as MediShield life premium subsidies as well as subsidies for outpatient and inpatient treatment at public hospitals.
• The monthly per capita household income threshold for each subsidy tier will range fromS$100 to S$800.

Supporting seniors to age well

• The government will set aside $3.5 billion for Age Well SG initiatives over the next decade.
• The programme will feature an expanded network of active Ageing Centres, more assisted living options, upgrades to residential estates that enable seniors to live more independently and improvements to commuter infrastructure for seniors’ mobility and safety.
• In line with the recommendations of the Tripartite Workgroup on Older Workers, the CPF contribution rates for those aged 55 to 65 will be increased by a further 1.5 percentage points in 2025.•Enhanced Retirement Sum (ERS) will be raised: o\
  • ERS will be increased from three times the Basic Retirement Sum to four times from 2025. This means the ERS next year will be $426,000. This will allow more members aged 55 and above to fully commit their accumulated CPF savings to receive higher CPF payouts, should they wish to do so.
• Rationalising the CPF system:
  • From next year, the SA – the Special Account – will be closed for those aged 55 and above. The SA savings will be transferred to the RA – the Retirement Account – up to the Full Retirement Sum, where they will continue to earn the long-term interest rate.
    • The remaining SA savings will be transferred to the Ordinary Account. Of course, members can voluntarily transfer their OA savings to the RA at any time, up to the revised ERS, to earn higher interest, and to receive higher retirement payouts.

Assurance for families and households

• The government will introduce a series of initiatives to offer more support for lower-income families and those with larger households in order to defray increases in the cost of living.
  • An additional $600 in Community Development Council (CDC vouchers) for all Singaporean households.
  • A one-off additional cost-of-living special payment of $200 to $400 for all Singaporean adults.
  • A one-time U-Save rebate disbursed to eligible HDB households, with up to $950 of rebates from Apr 2024 to March 2025 for Singaporeans to cope with increases in utility bills.
  • A $6 billion top-up for the GST Voucher Fund to defray GST expenses.