Singaporean businesses will be able to pay a 50 % corporate income tax exemption in the 2025 fiscal year, according to Prime Minister and Finance Minister Lawrence Wong on Tuesday ( Feb 18 ).
” Higher costs… affect our companies, many of whom are grappling with the higher cost of rent and labour”, said Mr Wong in his Budget 2025 conversation.
Eligible firms will also receive a cash grant of S$ 2, 000 ( US$ 1, 500 ), even if they are not profitable. They may be active and have at least one local contractor employed by 2024.
The overall benefit that a business can get – including , both income grant and discount – will become capped at S$ 40, 000.
According to the Ministry of Finance, ready businesses will start receiving the funding in 2025’s second quarter.
INCREASE IN GOVERNMENT CO-FUNDING
Additionally, Mr. Wong made the announcement that the government would give companies more assistance in raising the earnings of lower-wage workers.
” Despite facing higher cost pressure, I’m glad that some companies remain committed to uplifting the income of lower-wage staff”, he said. The government will continue to bear this burden on businesses.
The state pays a portion of the pay raise that an company gives to employees under the Progressive Wage Credit program, which was introduced in 2022.
This time, the government will raise its co-funding levels to 40 per cent, up from 30 per cent. Next time, this will be 20 per share, away from 15 per cent.
In 2024, the president’s co-funded level was 50 per cent.
The co-funding applies to staff whose ordinary gross monthly salary were S$ 3, 000 and under before the salary raise, and upward to S$ 4, 000 after the raise.
At least S$ 100 in annual increases are required.
The Ministry of Finance stated that the government would co-fund the pay raise for both times if it continued in one.