Singapore’s Budget 2026, announced today, focuses on fostering innovation and internationalisation amidst global uncertainties. The government has maintained corporate and personal tax rates, leveraging a robust fiscal position to sustain long-term stability. Deloitte Singapore experts highlighted the strategic emphasis on AI and digitalisation, with substantial tax incentives to encourage businesses to adopt AI-driven solutions and expand internationally.
The Double Tax Deduction for Internationalisation (DTDi) scheme has been enhanced, increasing the tax deduction cap from S$150,000 to S$400,000, allowing more qualifying activities to be eligible for automatic claims. This move aims to simplify processes for businesses and encourage overseas expansion. Larry Low from Deloitte Singapore noted, “The increased tax deduction cap should encourage more companies to expand overseas.”
Additionally, the Enterprise Innovation Scheme (EIS) now includes AI-related expenditures as qualifying activities, offering up to 400% tax deductions. This expansion is designed to lower the cost of AI adoption for both large enterprises and SMEs. Yvaine Gan of Deloitte Singapore stated, “AI adoption is no longer optional – it is a strategic necessity.”
The Budget also extends the Global Trader Programme for another five years, maintaining competitive tax incentive rates. However, Deloitte’s Lee Tiong Heng cautioned that more could be done to ensure Singapore remains attractive to global trading companies.
Overall, Budget 2026 positions Singapore as a forward-thinking hub, ready to tackle global challenges through innovation and strategic international partnerships.
