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EY today released its reactions to the Singapore Budget 2026, with the aim of supporting Singaporeans today, and prepare for tomorrow.
Mr. Liew Nam Soon, EY Singapore and Asean Managing Partner, Asia East Deputy Regional Managing Partner at Ernst & Young Solutions LLP, says:
“Singapore Budget 2026 embodies resilience and adaptability. It acknowledges the complexities of our time, the intersections with geopolitical and technological influences, and the evolving aspirations of our society. Two pivotal priorities stand out: enabling our enterprises and people to translate AI potential into real and meaningful value; and enriching not just livelihoods but every stage of life of Singaporeans as we continue to strengthen our social compact."
Ms. Amy Ang, Singapore Head of Tax, Ernst & Young Solutions LLP, says:
“Singapore’s strong fiscal position provides the foundation for the government to make targeted, forward-looking investments – supporting companies in their internationalisation journey, accelerating AI and technology adoption while strengthening workforce capabilities for a rapidly evolving economy. Transformation cannot be a sole government-led movement. There needs to be vested partnership from companies and individuals to step up and innovate, digitalise and continually upskill.”
Advancing our refreshed economic strategy
Ms. Amy Ang, Singapore Head of Tax, Ernst & Young Solutions LLP, says:
“Budget 2026 comes at a critical time for SMEs that continue to grapple with persistent cash flow pressures and escalating operating costs. The 40% corporate income tax rebate for Year of Assessment 2026 with a minimum benefit of S$1,500 can provide some immediate liquidity support to SMEs.”
Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP, says:
“Budget 2026 presents a strategic moment to empower SMEs seeking to enter new markets. Overseas expansion often requires significant upfront spending – from market research and regulatory compliance to overseas branding and partnership formation. The enhanced Market Readiness Assistance grant and expanded qualifying activities under the Double Tax Deduction for Internationalisation scheme can make regional expansion more achievable. With these support, more local enterprises can internationalise and scale beyond Singapore to compete effectively on the international stage.”
Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP, says:
“Budget 2026 provides a timely opportunity to strengthen SME competitiveness by sharpening corporate tax measures that directly support AI adoption. Many smaller firms recognise the need to digitalise and embed AI into their operations but continue to face upfront investment constraints. The expansion of the Enterprise Innovation Scheme (EIS) that grants a 400% tax deduction on qualifying activities to cover AI-related expenditure for Years of Assessment 2027 and 2028 would lower the barriers to adopting automation, data analytics and intelligent technologies. With the right support, SMEs can scale their AI capabilities more confidently, boost productivity and participate more fully in emerging growth sectors. Budget 2026 can play a catalytic role in ensuring that AI driven transformation is inclusive and attainable for SMEs across all industries. The expansion of the Productivity Solution Grant will complement the EIS to support the adoption of digital and AI solutions by businesses.”
Ms. Tracy Tham, Partner, Business Incentives Advisory, Ernst & Young Solutions LLP, says:
“Singapore’s proposed S$37b investment under the Research, Innovation and Enterprise 2030 plan over five years, is a significant commitment to research and innovation. This is the highest investment thus far and sends a clear message on its ambition to develop, test and commercialise frontier technologies.”
Mr. Johanes Candra, Partner, Business Incentives Advisory, Ernst & Young Solutions LLP, says:
“In a world where many jurisdictions are deploying aggressive onshoring incentives, Singapore recognises that staying attractive means continually updating and strengthening our investment promotion toolkit. The implementation of the BEPS Pillar Two top-up tax provides a more stable revenue base to do so, enabling Singapore to compete not just on headline tax rates, but through targeted support for high value, substantive investments.”
Mr. James Choo, Partner, International Tax and Transaction Services, Ernst & Young Solutions LLP, says:
“As Singapore navigates the new global tax landscape, the significant increase in Ministry of Trade and Industry’s expenditure sends a strong message that investment promotion is an important aspect for Singapore to stay ahead in the game. The calibration of these incentives will unfold in the months ahead, and time is of the essence as multinationals are eagerly looking to Singapore’s response as they plan their investments. It is thus important for the government to move decisively and provide early clarity on its incentive framework so businesses can plan with confidence and maintain their long-term commitments to Singapore.”
Mr. Stephen Bruce, Partner, Financial Services Tax, Ernst & Young Solutions LLP, says:
“Budget 2026 underscores a strong and deliberate commitment to reinforcing Singapore’s capital markets. The enhancements to the Anchor Fund and Equity Market Development Programme can support high growth companies through their capital raising journeys, anchor high-quality public listings in Singapore and increase investment demand for Singapore-listed equities.”
Mr. Chan Yew Kiang, EY Asean and Singapore IPO Leader, says:
“Since its launch in early 2025, the Equity Market Development Program (EQDP) has strengthened Singapore's capital markets, boosted liquidity, improved valuation of small- and mid-cap stocks and led to an increase in IPOs. Any additional infusion of support would help sustain these earlier efforts, further enhancing investors’ participation, liquidity and strengthening the local equity markets.”
Harnessing AI as a strategic advantage
Mr. Manik Bhandari, EY Asean Data and Artificial Intelligence Leader, says:
"Budget 2026 signals a critical shift to making AI literacy a core life skill for Singaporeans. It’s important to make AI work for every worker – to mitigate job anxieties, transition confidently into higher-value roles in an AI-enabled economy, and use AI responsibly. To achieve the intent, Singaporeans must now take initiative, take charge and take advantage of the support measures."
Mr. Chai Wai Fook, Partner, Tax Services, Ernst & Young Solutions LLP, says:
“Budget 2026 provides a timely opportunity to strengthen SME competitiveness by sharpening corporate tax measures that directly support AI adoption. Many smaller firms recognise the need to digitalise and embed AI into their operations but continue to face upfront investment constraints. The expansion of the Enterprise Innovation Scheme that grants a 400% tax deduction on qualifying activities to cover AI-related expenditure for Years of Assessment 2027 and 2028 would lower the barriers to adopting automation, data analytics and intelligent technologies. With the right support, SMEs can scale their AI capabilities more confidently, boost productivity and participate more fully in emerging growth sectors. Budget 2026 can play a catalytic role in ensuring that AI driven transformation is inclusive and attainable for SMEs across all industries.”
Mr. Manik Bhandari, EY Asean Data and Artificial Intelligence Leader, says:
“The government’s AI policy levers signal a shift from experimentation to enterprise-wide adoption. Programs like AI Champions should focus on companies with AI-ready data, the right talent and a value-focused use case strategy, supported by a credible roadmap for transformation. Singapore can move the needle by backing high-growth companies with scale and depth or identifying ‘big bets’. It is imperative to select the right AI champions in this first wave as any misstep could undermine the credibility and success of the entire program. One way is through high-performing Enterprise Compute Initiative graduates progressing into a structured AI Champions track.”
Mr. Goh Jia Yong, Partner, People Consulting, Ernst & Young Advisory Pte. Ltd., says:
“The enhanced support for students and workers to uplift AI literacy and adapt the use of AI in their work will help our workforce maintain relevancy in a changed world. For the adult workforce, the enhancement in SkillsFuture Level-Up Programme to cover part-time training and industry-relevant courses gives flexibility for Singaporeans to upskill while balancing work-life commitments.”
Mr. Manik Bhandari, EY Asean Data and Artificial Intelligence Leader, says:
“Supporting businesses to better harness the transformative potential of AI in their operations will also contribute to anchoring more AI Centres of Excellence in Singapore as the country focuses on AI as a strategic advantage.”
Mr. Samir Bedi, EY Asean People Consulting Leader, says:
“Budget 2026 integrates boosting skills and harnessing AI for better, higher value jobs for Singaporeans. The transformation of key sectors and pushing boundaries through national AI Missions will create new tasks in jobs that will be in high demand. AI transformation of companies is at the centre of creating right employment and the Champions of AI program enables transformation. With the Prime Minister chairing the National AI Council, its importance is even further heightened.”
Mr. Desmond Teo, Asean EY Private Tax Leader, says:
“The foundation for Singapore’s AI aspiration has been in development over the past decade. The initiatives announced reflect a coordinated national effort to harness AI to strengthen Singapore’s economy and benefit all Singaporeans – driving transformation in key sectors, supporting enterprises and ensuring workers are supported as jobs evolve.”
Building a resilient and skilled workforce
Mr. Samir Bedi, EY Asean People Consulting Leader, says:
“The focus move from lifelong learning to an outcome of employability is evident in Budget 2026 with selected courses getting six months access to premium AI tools. The revamped SkillsFuture website will improve user experience for the right learning, while the merger of SkillsFuture Singapore and Workforce Singapore will deliver seamless, end-to-end career and employment services for Singaporeans who are willing to adapt and learn. By bringing jobs and skills under a single agency, the government aims to better align future skills with future job needs.”
Ms. Lily Cheang, Partner, People Advisory Services Tax, Global Immigration, Ernst & Young Solutions LLP says:
“The adjustment to the Local Qualifying Salary ensures that lower-wage employees are paid meaningfully, keeping pace with the overall salary growth. While it indirectly tightens access to foreign manpower by raising the baseline cost of hiring locals, it encourages employers to offer more competitive wages so that local hires meet the new threshold and count towards foreign worker quotas. Ultimately, companies will need to strengthen efforts to attract and retain local employees through better pay, skills development, and job redesign. Importantly, the government has also enhanced the Progressive Wage Credit Scheme to help employers defray rising wage costs, increasing co-funding support for wage increment providing additional buffer as firms adjust to higher local wage floors.”
Ms. Lily Cheang, Partner, People Advisory Services Tax, Global Immigration, Ernst & Young Solutions LLP says:
“Budget 2026 introduces targeted refinements to Singapore’s foreign manpower regime by adjusting levies and increasing qualifying salaries for both Employment Pass and S Pass holders. These changes reinforce the government’s continued focus towards a higher quality and more competitive workforce. Businesses will need to reassess manpower strategies, manage cost impacts, and deepen local talent development to stay aligned with the evolving requirements.”
Supporting Singaporeans
Mr. Panneer Selvam, EY Asean People Advisory Services Tax Leader, says:
“The extension of enhanced tax deductions for donations and the Corporate Volunteer Scheme, alongside the new S$50 million SG Partnerships Fund, reinforces Singapore’s commitment to a ‘We First’ society. By combining fiscal incentives with sustained, multi-year support for ground-up initiatives, the government is signalling that giving and volunteering are central to long-term resilience and inclusive growth. For businesses, this creates clearer pathways to integrate purpose into strategy, strengthening employee engagement, deepening community partnerships and building trust as part of long-term value creation.”
Mr. Desmond Teo, Asean EY Private Tax Leader, says:
“The extension of the 250% tax deduction for donations to an Institution of a Public Character (IPC), together with the Corporate Volunteer Scheme, continues to provide strong incentives for individuals and companies to give back to society, both in cash and in kind.”
Charting a sustainable future
Mr. Amandeep Bedi, Partner, Climate Change and Sustainability Services, Ernst & Young LLP, says:
“The carbon tax ending up at the lower end of the S$50-80 range in 2030 is unlikely to derail Singapore’s energy transition as businesses have already been embedding decarbonization into their strategies. To maintain momentum, Singapore could complement the tax with targeted measures. For example, setting eligibility criteria to incentivize low-carbon technologies like biomethane-based power in the data centre sector; continuing grants and rebates to accelerate energy efficiency, solar and electric mobility adoption, and engaging neighboring countries to enable the import of renewable energy. These levers can strengthen the business case for low-carbon projects and create positive spillover effects across other local industries.”
Mr. Amandeep Bedi, Partner, Climate Change and Sustainability Services, Ernst & Young LLP, says:
“Despite the softening of global commitments in addressing climate change, the consistent stance of the government sends a clear signal towards maintaining Singapore’s green transition plan. Raising the local solar deployment target to 3 giga-watt peak will spur further investments and provide additional options for local businesses to decarbonise.”
Ms. Toh Shu Hui, Partner, Tax Services, Ernst & Young Solutions LLP, says:
“It is reassuring that Singapore continues to be committed to its energy transition and decarbonisation goal. The move towards a lower end of the range is a pragmatic and calibrated approach to ensure that businesses and the economy will not be unduly burdened by higher operating costs as a result of a higher carbon tax rate, amid global uncertainties and other pressing demands."
Mr. Desmond Teo, Asean EY Private Tax Leader, says:
“While the proposed reduction of the PARF rebate by 45% and the PARF rebate cap to S$30,000 reflects the less pollutive nature of electric vehicles, this could have an unintended impact of increasing the taxation of wealth via the vehicle ownership.”
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Notes to Editors
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