Top-up for the National Productivity Fund
In his Budget speech on Tuesday (Feb 14), Finance Minister Lawrence Wong announced that an additional S$4 billion will be added to the National Productivity Fund (NPF), and that investment promotion will be considered a supportable activity. Wong stated that the fund will be utilized to attract high-quality investments to Singapore, which will support a “wide range of measures” focused on enhancing productivity, continuing education, and training. These investments will enable local businesses to develop new capabilities, add more value to the domestic ecosystem, and improve workers’ skills, ultimately leading to higher-paying jobs for Singaporeans. The government had previously announced a S$1 billion investment to the NPF to support industry transformation in Budget 2017.
New schemes announced to enhance tax deductions for innovation activities
During his Budget speech on Tuesday (Feb 14), Finance Minister Lawrence Wong announced that the government will introduce a new Enterprise Innovation Scheme that will increase tax deductions for businesses engaged in key innovation-boosting activities. Currently, businesses are allowed tax deductions of up to 250 per cent of qualifying expenditure on certain activities. The government will now raise the tax deductions to 400 per cent of qualifying expenditure for five activities. These activities include research and development carried out in Singapore, registration of intellectual property, acquisition and licensing of intellectual property rights, innovation carried out with polytechnics and Institutes of Technical Education, and training approved by SkillsFuture Singapore and aligned to the Skills Framework. The qualifying expenditure for each activity will be capped at S$400,000, except for innovation carried out with polytechnics and ITEs, which will have a cap of S$50,000. Wong noted that businesses that take full advantage of the scheme could enjoy tax savings of nearly 70 per cent of their investment.
S$1 billion top-up to Singapore Global Enterprises initiative
During Tuesday’s (Feb 14) Budget speech, Finance Minister Lawrence Wong announced that the government will provide additional financing for two initiatives that have produced promising results in 2022.
The first initiative, Singapore Global Enterprises, will receive a S$1 billion boost to provide customised assistance to promising companies in areas such as innovation, internationalisation, and partnerships with other firms. The funding is intended to create a “healthy pipeline” of companies with a strong track record of international success and take them to the next level. The specialised support includes tailored capability-building programs, working with experts to strengthen core leadership teams, accelerating internationalisation plans, and building robust talent pipelines.
$150 million in funding to the SME Co-Investment Fund
The second initiative, the SME Co-Investment Fund, will receive an additional S$150 million in funding after previous rounds of funding produced positive outcomes. Wong said that the government will continue to support companies in accessing capital to scale up and remain globally competitive as they grow.