SINGAPORE BUDGET 2026

Budget 2026: Tailored programmes, tax deductions to support AI use in businesses; bigger AI park to be built at one-north

The Champions of AI programme will include enterprise transformation and workforce training

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Tan Nai Lun

Published Thu, Feb 12, 2026 · 04:00 PM

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Singapore will also build a larger AI park at one-north to catalyse ideas, forge collaborations and translate AI initiatives into practical solutions. PHOTO: REUTERS

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[SINGAPORE] Singapore will roll out tailored programmes and introduce tax deductions to support the adoption of artificial intelligence (AI) by businesses, said Finance Minister Lawrence Wong in his Budget speech on Thursday (Feb 12).

To encourage more companies to engage in AI transformation, Singapore will launch a new Champions of AI programme.

The initiative will tailor support to each company and will include enterprise transformation and workforce training.

“As these companies succeed, they will set benchmarks for their industries and inspire others to follow,” said Wong, who is also prime minister.

Singapore will also expand the Enterprise Innovation Scheme to include AI expenditures as a qualifying activity.

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Currently, the programme provides businesses with 400 per cent tax deductions on qualifying expenditures in activities such as research and development, innovation and capability development.

AI expenditures will be included in the scheme for the year of assessment 2027 and 2028, capped at S$50,000 per year.

Meanwhile, Singapore will expand the Productivity Solutions Grant to support a wider range of digital and AI-enabled solutions.

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Corporate income tax collections were a key driver of FY2025's higher-than-expected revenue.

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Driving the increase in total expenditure is the Ministry of Trade and Industry, whose outlay in FY2026 is expected to rise by S$4.5 billion – or 68.5 per cent – to S$11.1 billion.

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Singapore can expect higher corporate tax collections from the 2027 financial year onwards.

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The move comes as electric vehicles become more common, and the need to encourage early deregistration through the Parf rebate is reduced.

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The country is also committed to achieving 100% cleaner-energy vehicles and pursuing greening efforts in aviation and shipping.

Budget 2026: Singapore raises solar deployment target to 3 GWp by 2030

Singapore already has the highest carbon tax rate in the whole of Asia.

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The grant and scheme will be extended to help firms invest in energy-efficient and sustainable solutions.

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Attackers often exploit smaller or less-protected companies to gain access to larger systems, but many companies lack the resources or expertise to handle advanced cyberthreats, PM Wong notes.

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The special payment, to be disbursed in September, will range from S$200 to S$400 in cash and be paid to about 2.4 million adult Singaporeans.

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CPF Board will launch simplified low-cost portfolios based on a glide path mechanism that gradually de-risks the portfolio as members near retirement.

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Singapore will also top up the Long-Term Care Support Fund by S$400 million to fund additional subsidies.

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There will be no adjustments for the levy rate of higher-skilled Work Permit holders.

Budget 2026: Levy for basic-skilled Work Permit holders to increase by S$100 for marine sector, S$150 for process sector

For new EP applicants, the qualifying salary will increase to S$6,000 from S$5,600.

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The Ministry of Manpower is set to release recommendations from its Tripartite Workgroup on Senior Employment later this year.

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The new agency will enable “more seamless end-to-end career and employment services for Singaporean workers”, note MOM and MOE.

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Progressive Wage Credit Scheme co-funding support for 2026 will rise to 30 per cent, from 20 per cent.

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Budget 2026 is the first since last year’s General Election, and the first in this term of government.

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