Singapore’s Budget 2026, delivered by Deputy Prime Minister and Finance Minister Lawrence Wong on 18 February 2026, introduced a range of measures aimed at helping businesses — particularly small and medium enterprises (SMEs) — navigate a challenging global economic environment. From corporate income tax rebates to enterprise development grants and workforce support schemes, the Budget 2026 package offers meaningful relief for qualifying companies. This guide summarises the key measures relevant to Singapore SMEs.

Corporate Income Tax Rebate 2026

One of the headline measures for businesses in Budget 2026 is the Corporate Income Tax (CIT) Rebate. For the Year of Assessment (YA) 2026, qualifying companies receive a CIT rebate of 50% of tax payable, capped at S$40,000.

In addition, companies that employed at least one local employee in 2025 are eligible for a CIT Rebate Cash Grant. Qualifying companies receive a minimum cash payout of S$2,000, regardless of whether they have tax payable. The cash grant is designed to ensure that even companies in a tax loss position — which would receive no benefit from the tax rebate itself — still obtain some Budget relief.

The CIT Rebate applies to companies that are tax-resident in Singapore and whose income is subject to the standard corporate tax rate of 17%. The rebate does not apply to income taxed at concessionary rates under specific incentive schemes.

For companies that are unsure of their tax position for YA 2026, it is worth engaging your corporate accountant early to assess the impact of the rebate and plan estimated chargeable income (ECI) filing accordingly. For an overview of Singapore corporate tax fundamentals, visit the Inland Revenue Authority of Singapore (IRAS) corporate income tax portal.

Enterprise Development Grant (EDG) Enhancements

The Enterprise Development Grant (EDG), administered by Enterprise Singapore, continues to be one of the most versatile funding tools for Singapore SMEs. Budget 2026 extended the enhanced support levels introduced in previous Budgets, maintaining the EDG co-funding rate at up to 50% for SMEs (and up to 70% for SMEs in specific priority areas such as internationalisation and capability building).

The EDG supports projects across three pillars:

  • Core Capabilities: Business strategy, financial management, human capital development, service excellence, and strategic brand and marketing development.
  • Innovation and Productivity: Automation, process redesign, product development, and technology adoption.
  • Market Access: Overseas market setup, standards and certifications, and mergers and acquisitions.

For Singapore SMEs looking to digitise operations, adopt new business software, or expand into regional markets, the EDG remains a key starting point. Applications are submitted via the Business Grants Portal administered by Enterprise Singapore.

SkillsFuture Enterprise Credit (SFEC) — Continued Support

Budget 2026 confirmed the continuation of the SkillsFuture Enterprise Credit (SFEC), which provides eligible employers with a one-off S$10,000 credit to defray out-of-pocket costs of business transformation and employee upskilling initiatives. The SFEC can be used to offset qualifying costs under Enterprise Singapore and Workforce Singapore (WSG) programmes.

Companies with at least three Singapore citizen or permanent resident employees, and which have contributed to the Skills Development Levy for the qualifying period, are generally eligible. The credit can be used on approved programmes covering job redesign, employee training, and enterprise capability building.

Wage Credit Scheme (WCS) — Final Year

The Wage Credit Scheme (WCS) — which co-funds wage increases for Singaporean employees earning up to S$3,000 per month — entered its final year in 2026. Budget 2026 confirmed that the government will continue to co-fund 15% of qualifying wage increases for 2025 (paid out in 2026), with no extension beyond this final tranche.

SMEs that have been relying on the WCS to help manage rising labour costs should factor in its expiry when planning their 2026 and 2027 salary budgets. For companies with significant headcount, the transition away from WCS support may have a material impact on payroll costs.

Progressive Wage Model (PWM) — Expanded Coverage

Budget 2026 confirmed the continued expansion of the Progressive Wage Model (PWM) to additional sectors. The PWM sets out minimum wage progression pathways based on skills upgrading, and is now mandatory in the cleaning, security, landscape, retail, food services, waste management, and in-house cleaning and security sectors.

For SMEs in covered sectors, PWM compliance is a prerequisite for obtaining government contracts and government-related grants. Companies that have not yet updated their payroll to reflect PWM wage levels should do so promptly to maintain eligibility for government support. The Ministry of Manpower’s Progressive Wage Model page provides up-to-date sector requirements.

GST Voucher Scheme and Household Support — Indirect SME Impact

While not directly targeted at businesses, the GST Voucher and Household Support packages in Budget 2026 provide rebates and cash payouts to lower- and middle-income Singaporean households. For B2C businesses — particularly retail, F&B, and consumer services — this translates into a modest boost to consumer spending power, which may benefit revenue in the short term.

Productivity Solutions Grant (PSG) — Ongoing Support

The Productivity Solutions Grant (PSG) remains available in 2026, supporting SMEs in adopting pre-approved IT solutions and equipment. The PSG co-funds up to 50% of qualifying costs for solutions in areas including customer management, data analytics, inventory tracking, payroll, and financial management software.

For SMEs that have not yet digitalised core business functions — particularly accounting, HR, and customer relationship management — the PSG offers a cost-effective entry point. Approved solution providers are listed on the Enterprise Singapore website and applications are submitted through the Business Grants Portal.

Raffles Corporate Services works with SMEs on accounting setup, payroll implementation, and corporate secretarial compliance. If you are looking to adopt an accounting or payroll solution and want guidance on what qualifies under the PSG, our team can assist.

How to Make the Most of Budget 2026 Measures

To maximise the benefit of Budget 2026 support for your business, consider the following steps:

  • Confirm your CIT Rebate eligibility: Engage your accountant to estimate your YA 2026 tax payable and confirm whether you qualify for the rebate and cash grant.
  • Review EDG eligibility: Identify business transformation projects that could attract EDG co-funding, and apply early — EDG applications are competitive and processing times vary.
  • Use SFEC before it expires: Check your remaining SFEC balance and identify approved programmes to deploy the credit before the scheme ends.
  • Plan for WCS phase-out: Update salary budgets to reflect the end of WCS co-funding.
  • Check PWM compliance: If your business is in a covered sector, confirm that your payroll reflects current PWM wage schedules.

For assistance with corporate tax, payroll, and accounting compliance in the context of Budget 2026, contact Raffles Corporate Services. We provide end-to-end support for Singapore SMEs — from company incorporation to ongoing accounting and bookkeeping and corporate secretarial services.

Contact us at [email protected] or call +65 8501 7133. You can also visit us at 10 Anson Road, #10-11 International Plaza, Singapore 079903.

The Editorial Team, Raffles Corporate Services