Highlights of Singapore Budget 2023 for the Corporate and Business Sector 

Deputy Prime Minister and Minister for Finance, Mr Lawrence Wong, delivered the Singapore Budget 2023 statement on Tuesday, 14 February 2023, in Parliament. Here are the main highlights for the corporate and business sector. Moreover, learn about on the key changes from Singapore Budget 2023 and how if affects your company.

To foster a growing economy, the Singapore Budget 2023 aims to continually support businesses. To help develop local enterprises, the government will: 

• Set aside $1 billion to provide customised support for promising local companies under Singapore Global Enterprises initiative  
• Additional $150 million via SME Co-Investment Fund to invest in promising SMEs  

To promote skills development and strategic investments for long-term value, the National Productivity Fund will be increased by up to $4 billion. This will broaden its scope to include support for investment promotion. 

In order to maintain widespread innovation throughout the economy, the Budget 2023 introduces the Enterprise Innovation Scheme (EIS), which would enhance tax deductions and allowances with a cash conversion option.

To manage cost constraints: 

1. Enterprise Financing Scheme enhancements are set to be extended until 31 Mar 2024 to facilitate access to credit:  

• 70% Government risk-share for trade loans  
• Enhanced maximum quantum for trade and working capital loans  
• Support for domestic construction projects via project loans  

2.  Energy Efficiency Grant will be available until 31 Mar 2024 for SMEs in Food Services, Food Manufacturing, and Retail sectors to adopt energy-efficient equipment, given higher electricity prices  

Singapore’s 2023 budget provides an array of support for local employees

One of which is topping up $2.4 billion to Progressive Wage Credit Scheme fund for lower wage workers and maintain higher Government co-funding share of eligible wage increases in 2023: 

• Wages up to $2,500 will be increased by 50% to 75% 
• Wages above $2,500 and up to $3,000 will be increased by 30% to 45% 

The government will extend Senior Employment Credit and Part-time Re-employment Grant for senior workers until 2025. It will continue providing wage offsets, and encourage employers to offer flexible work arrangements and structured career planning. 

Moreover, employment of persons with disabilities will be encouraged thru the Enabling Employment Credit while Uplifting Employment Credit will be introduced to encourage employment of ex-offenders. 

Singapore Budget for 2023 upholds a tax system that is both competitive, resilient, and fair.

It is designed to promote economic growth and prosperity while ensuring equitable treatment of all taxpayers. Below are the tax updates: 

1. Corporate Income Tax 

  Base Erosion and Profit Shifting Initiative (BEPS 2.0)  

• The Global Anti-Base Erosion (GloBE) rules under BEPS Pillar 2 and Domestic Top-up Tax (DTT) will be implemented for large Multinational Enterprise (MNE) groups from businesses’ financial year starting on or after 1 Jan 2025  
• International developments will be monitored and make adjustments as needed if there are delays  

• Industry development schemes will be updated to ensure that Singapore remains competitive in attracting and retaining investments  

     2.    Buyer’s Stamp Duty & Additional Conveyance Duties for Buyers  

•  The Buyer’s Stamp Duty (BSD) rates is increased for higher-value properties, effective 15 Feb 2023:  
  • For residential properties, the portion of the property value:  
    • In excess of $1.5 million and up to $3 million will be taxed at 5% (up from 4%) 
    • In excess of $3 million will be taxed at 6% (up from 4%)  
  • For non-residential properties, the portion of the property value:  
    • In excess of $1 million and up to $1.5 million will be taxed at 4% (up from 3%) 
    • In excess of $1.5 million will be taxed at 5% (up from 3%)  

• The BSD rates on or before 14 Feb 2023 will apply for eligible transitional cases  
•  Additional Conveyance Duties for Buyers, which applies to qualifying acquisitions of equity interest in property holding entities, will be adjusted accordingly  

Tobacco Excise Duty  

Excise duty on all tobacco products will be increased by 15 percent, effective Feb. 14, 2023 to discourage consumption, thus promoting a healthier Singapore. 

For more details on business advisory and registration services, you can contact us.