LivePM Lawrence Wong delivers Budget 2026

$1.5b top-up to Financial Sector Development Fund

PM Wong said more efforts will be taken to strengthen Singapore’s broader equities market.

In 2025, the Monetary Authority of Singapore (MAS) launched the Equity Market Development Programme to develop the Republic’s fund management industry and increase investor participation in its equities.

Industry response has been encouraging, he noted.

With MAS having allocated $4 billion to nine asset managers, PM Wong announced that he will expand the programme with a $1.5 billion top-up to the Financial Sector Development Fund.

He added that the Government was also implementing the Equities Market Review Group’s other recommendations, including streamlining listing rules and requirements that make it easier for high-growth companies to go public.

Second $1.5 billion tranche of the Anchor Fund to be launched

PM Wong said a more systemic approach will be taken to strengthen Singapore’s growth capital ecosystem by convening a new workgroup helmed by National Development Minister Chee Hong Tat.

PM Wong cited the Anchor Fund that was set up to attract and anchor high-quality public listings, and for which Singapore is now seeing rewards.

He announced that he will be launching a second $1.5 billion tranche of the Anchor Fund. As with the first tranche, this will be a co-investment between the Government and Temasek. 

Govt to set aside $1 billion to enhance Startup SG Equity scheme

PM Wong said efforts will also be taken to strengthen Singapore’s enterprise ecosystem.

He noted that many companies still face challenges at the growth stage and later find it challenging to raise the larger and longer-term funding needed to scale.

Under the Startup SG Equity scheme, the Government provides initial capital to catalyse and crowd in private funding for promising start-ups. The current scheme focused mainly on early-stage fundings.

PM Wong said he will set aside $1 billion to enhance the scheme and expand its scope to cover growth-stage companies.

Govt to invest $37 billion under Research, Innovation and Enterprise plan

PM Wong noted the importance of establishing leadership in key industry clusters.

Citing semiconductors, he said the key frontier in this industry is Advanced Packaging – which integrates multiple chips into a single package using highly precise manufacturing technologies.

He added that Singapore began investing in this more than 20 years ago – before it became a global priority. It has now taken off.

PM Wong said other key industries, including aerospace and biomedical sciences, are also good opportunities.

He then announced that the Government will invest $37 billion under the Research, Innovation and Enterprise, or RIE 2030 plan.

This reflects Singapore’s sustained commitment to research and innovation, amounting to around 1 per cent of gross domestic product each year, he added.

But we must be realistic, PM Wong said, adding that our investments must be disciplined, focused and strategic. 

Tax rebates, enhanced grants to help Singapore businesses cope with rising cost and competition

Ovais Subhani Senior Business Correspondent

PM Wong announced a 40 per cent rebate on corporate income tax to help companies manage cost pressures and stay competitive.

And companies seeking to venture abroad will get even more support in the form of higher grants and financing on loans.

The corporate income tax rebate will be automatically given - starting second quarter of calendar 2026 - to every active company that employed at least one local employee in 2025.

The minimum rebate a company may receive is set at $1,500, while the total rebate benefit will not exceed $30,000.

PM Wong said the measures were part of Singapore's efforts to refresh its economic strategy which seeks to encourage businesses to restructure and transform as the global economy becomes more challenging.

More support to help companies expand overseas

Doing business overseas is not easy, especially for smaller companies, as they face unfamiliar regulations and intense local competition, PM Wong noted.

The Government will therefore do more to support Singapore companies as they venture abroad.

Support levels for grant schemes that help companies internationalise will be enhanced – up to 70 per cent for small and medium-sized enterprises (SMEs) and up to 50 per cent for non-SMEs.

The Government will also enhance the Market Readiness Assistance grant to support companies, not just to gain access to new markets, but also to deepen activities in existing overseas markets.

PM Wong said that 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.

The Government will allow more qualifying activities to be eligible for such automatic tax deduction claims and raise the cap to $400,000, he said.

He added that the Government will enhance the enterprise financing scheme by increasing the maximum loan quantum for trade and fixed asset loans, which gives companies more flexibility to cater to their different financing needs.

PM Wong said there will also be more support for companies pursuing significant overseas expansion that require higher capital outlay.

Deputy Prime Minister Gan Kim Yong, who is also Minister for Trade and Industry, will share more at the Committee of Supply. 

Singapore must stay connected to world, step up engagement in fast-growing markets

Singapore must remain connected to the world and adjust to new patterns of economic flow, which are more selective, with strategic partnerships and resilience as a priority.

PM Wong said that was the reason behind the Republic forging new forms of cooperation with partners who share its commitment, citing the Future of Investment and Trade Partnership, which was established in 2025, as an example.

He also said Singapore will step up engagement with fast-growing markets, including countries in Latin America, Africa and the Middle East, to establish new embassies and strengthen diplomatic and economic presence on the ground.

The Government is also working with our neighbours to deepen regional integration, such as the Johor-Singapore Special Economic Zone and the Batam, Bintan and Karimun free trade zones in Indonesia.

The measures help achieve the ambition of securing growth at the higher end of the 2 per cent to 3 per cent range over the next decade.

PHOTO: BT FILE

40 per cent corporate income tax rebate

Companies will enjoy a 40 per cent corporate income tax rebate in the 2026 year of assessment, PM Wong said.

Each active company that employed at least one local employee in 2025 will receive a minimum benefit of $1,500, with the total benefit for each company capped at $30,000, he added.

The measure will provide short-term relief, he said, noting that some businesses continue to face cost pressures and operating challenges despite the economy performing well in 2025.

Outline of Budget 2026

PM Wong said he will address the following in his speech: 

• Advancing Singapore’s refreshed economic strategy;
• harnessing artificial intelligence as a strategic advantage;
• building a resilient and skilled workforce;
• providing families more support and greater assurance;
• protecting security and sustainability;
• renewing and strengthening the Singapore spirit.

External developments will directly affect Singaporeans

PM Wong said there have been events in January alone that have increased geopolitical tensions worldwide. He expects rising public debt in many major economies to strain financial stability and weigh on longer-term growth prospects.

He warned that such external developments would directly impact Singaporeans.

PM Wong said the resilient global economy and Singapore’s economic strength led to a growth of 5 per cent in 2025.

He noted that this positive momentum will continue into this year, but there should also be expectations of a more moderate outlook for the year.

Growth is projected at 2 per cent to 4 per cent, with inflation expected to be between 1 per cent and 2 per cent, he added.

PHOTO: ST FILE