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The Singapore Budget 2026, themed “Securing Our Future Together in a Changed World”, emphasises the Singapore government’s commitment to maintaining fiscal resilience while accelerating digital and AI-driven transformation. For businesses and tax professionals, the budget focuses on productivity-linked incentives and measures to help manage the rising operational costs.
Enhancement of Corporate Income Tax (CIT) Rebate
A primary highlight is the enhancement of the CIT Rebate for Year of Assessment (YA) 2026. The CIT rebate has been raised from 40% to 50% of tax payable. Active companies that employed at least one local employee in 2025 will receive a minimum benefit of S$2,000 in the form of a CIT Rebate Cash Grant. Consequently, the total maximum benefits a company can receive have increased from S$30,000 to S$40,000.
Key Internationalisation Update: DTDi
The expenditure cap under the Double Tax Deduction for Internationalisation (DTDi) scheme for claims that may be filed without prior approval will be increased from S$150,000 to S$400,000 per YA, with effect from YA 2027. Additionally, the scope of activities eligible for claims without prior approval will be expanded to cover qualifying expenses incurred on overseas market development trips and overseas investment study trips, as well as other activities such as investment feasibility/due diligence studies, master licensing and franchising, market surveys/feasibility studies, overseas business development and production of corporate brochures for overseas distribution.
Driving Innovation: The “AI-First” Strategy
A new National AI Council, chaired by the Prime Minister, will streamline research, regulation, talent development and industry adoption. The key initiatives include:
- National AI Missions: Specific ecosystems for sectors like Advanced Manufacturing, Connectivity and Logistics, Finance and Healthcare to scale real-world AI applications.
- “Champions of AI” programme: Selected Singapore-based companies that make AI a core driver of productivity, innovation, and revenue growth will receive tailored support and access to curated expertise.
- Kampong AI: A new dedicated cluster at One-North to foster collaboration between startups, research institutes, multinational technology firms and investors.
Singapore will strengthen its talent base through the new National AI Impact Programme, which aims to build AI capabilities in up to 10,000 enterprises over the next three years and support 100,000 workers in becoming AI-bilingual.
Singapore is committing S$37 billion under the Research, Innovation and Enterprise (RIE) 2030 masterplan that covers key economic areas such as advanced manufacturing, semiconductors, biomedical sciences, sustainability technologies and quantum computing. Furthermore, an S$800 million decarbonisation challenge will fund low-carbon technology development, focusing on technology that can decarbonise the sectors responsible for most of Singapore’s emissions at scale.
Enterprise Innovation Scheme (EIS) Enhancement
The EIS is being enhanced for companies to claim 400% tax deductions on qualifying AI expenditures spend, capped at S$50,000 per year for YA 2027 and YA 2028. The option to convert qualifying expenditure into a cash payout will not be available for this new qualifying activity. Additionally, the list of partner institutions will be expanded to include the Sectoral AI Centre of Excellence for Manufacturing.
Reference/Citation
Corporate Income Tax Rate, Rebates & Tax Exemption Schemes | IRAS - https://www.iras.gov.sg/taxes/corporate-income-tax/basics-of-corporate-income-tax/corporate-income-tax-rate-rebates-and-tax-exemption-schemes
Budget Statement | Ministry of Finance, Singapore - https://www.singaporebudget.gov.sg/budget-speech/budget-statement
Singapore’s next growth chapter: What international businesses should know from Budget 2026 | EDB Singapore - https://www.edb.gov.sg/en/business-insights/insights/singapores-next-growth-chapter-what-international-businesses-should-know-from-budget-2026.html?cid=edm2-mktgcol:march_gbl_nl_a-na_global_newsletter-bau-gbl-202603-gbl-catch_up&cta_position=Main%20Article
