Navigating Singapore's Budget 2023: What Businesses Need to Know

Viewed by 2,563 Smart Towkays

Singapore's Budget 2023: What Businesses Need to Know


The Singaporean government has recently released its Budget 2023, which outlines the country's fiscal policies and strategies for the upcoming years. With this budget, businesses in Singapore need to be aware of the changes that will affect their operations and how they can best navigate these changes. This article will provide an overview of the key points from Singapore Budget 2023 and what businesses need to know in order to make informed decisions about their future.

Overview of Singapore’s Budget 2023

Singapore’s Budget 2023 is an important milestone for the country as it marks a new era of economic growth and development. It is the latest budget released since the COVID-19 pandemic hit and as such, it has been designed to help Singaporeans recover from the economic impact of the crisis.

The budget includes measures to stimulate job creation, support businesses, and protect vulnerable groups. It also provides funds for research and development, infrastructure investment, and social welfare programs. Let's check out what we will get from this Budget 2023.

The CPF Contribution Rate Is Set To Rise From $6,000 Up To $8,000 By 2026.

This move is part of the government's effort to ensure that Singaporeans are able to secure their financial future and enjoy a better quality of life in their golden years.

The CPF contribution rate will be gradually increased over the next four years including 2023. This will help Singaporeans save more for retirement and provide them with a secure financial cushion when they reach their retirement age.

But why? This is largely due to Singapore lately seeing the growing population of old-aged citizens which has sparkled an offset scheme as below since the start of 2023:

Employee's age (in years)

Contribution rates from 1 January 2023

(monthly income > $750)

By employer

(% of income)

By employee

(% of income)


(% of income)

55 and below

> 55 to 6014.51529.5
> 60 to 65119.520.5
> 65 to 708.5715.5
> 707.5512.5

Read also: Comprehensive Company Guide: CPF Contribution for Employees

Fairness Is Enhanced To Save Costs For Remote Employees With Flexi-Work Arrangements.

The COVID-19 pandemic has forced businesses to adopt remote working arrangements, with many companies offering flexi-work options to their employees. In 2024, it will be further enabled and supplied for them to save costs and ensure fairness in the workplace.

Since 2020, the number of people working from home has increased significantly, and flexi-work arrangements have allowed these employees to find a balance between their work and personal lives while still being able to contribute effectively to their organization.

By allowing employees the freedom to work remotely, employers can ensure that everyone is treated equally regardless of their physical location or other factors.

Read also: COVID-19 And Work-Life Grant 2020

Families Can Benefit Greatly From Increased Paternity Leave To 4 Weeks And Unpaid Infant Care Leave To 12 Days A Year.

The government-paid paternity leave is a great way to support families and ensure that parents are able to spend quality time with their new-borns. It allows fathers to take up to 4 weeks of paid leave, while each of the parents can take up to 12 days of unpaid infant care leave effective from 1 January 2024. This helps families adjust better to the new addition in their lives and give parents more time for bonding with their children.

This, in turn, helps them be more productive when they return back to work after the paternity/infant care leave period ends. Furthermore, it also ensures that there is no financial burden on the family during this period as they don't have to worry about lost wages due to taking unpaid leaves.

Previously, paternity leave was allowed up to 2 weeks and parents could take only 6 days of unpaid infant care leave before.

Singapore Government Has Extended Financing Support For SMEs With Enterprise Financing Scheme And Energy Efficiency Scheme Till 31 March 2024.

In Budget 2023, the government has enhanced the Enterprise Financing Scheme (EFS) and Energy Efficiency Scheme (EES) to 31 March 2024. This extension provides small and medium enterprises in Singapore with more time to take advantage of financing assistance from the government.

Check out what's entitled for your business under Enhanced EFS here.

Under Energy Efficiency Scheme, the grant* provides up to 70% risk-share for trade loans with participating financial institutions, allowing SMEs to access financing at more attractive terms. The EFS also provides incentives for companies to adopt energy efficient measures, helping them reduce their energy consumption costs and become more competitive in the domestic market.

This extension of financing support by the Singapore government is a much-needed relief for SMEs in Singapore who are struggling due to the economic downturn caused by COVID-19. With this extended support, businesses can now focus on growing their operations and expanding their reach without worrying about lack of funds.

*Energy Efficiency Grant (EEG) support for qualifying costs will be capped at S$30,000 per company per year.

More Update On Sustainability: Enterprise Sustainability Programme (ESP)

As one of the core features of ESP, sustainability courses are provided to assist local businesses and TACs in increasing their understanding of sustainability across a range of important themes and domains.

As stated in the Budget 2023, there will be an addition of thematic courses as 'sustainability playbooks' in Decarbonization and Sustainable Finance as well as enhance the current Foundational courses.

For the Food Services and Retail sectors, the EDG support level will be at up to 80% from 1 April 2022 to 31 March 2023. From 1 April 2023, SMEs can receive up to 50% support for EDG (sustainability-related projects may be supported at up to 70% from 1 April 2023 to 31 March 2026)

Senior Worker Support Package Will Be Available Through The End Of 2025.

As part of a continuing effort to promote employment and retention for senior Singaporean workers, Senior Worker Support Package which was announced in Budget 2020 will be made available through the end of 2025.

The Senior Employment Credit (SEC) will remain in place until 2025, providing wage support to employers of Singaporean senior workers aged 55 and above, earning up to $4,000 per month. This initiative offers employers wage offsets and serves as an incentive for them to hire senior workers.

Also, the Part-Time Re-Employment Grant will continue to be extended in a similar manner as SEC.

The government's commitment to support lower-wage workers is also evidenced through the Progressive Wage Credit (PWC) Scheme, which has received a top-up of $2.4 billion. This boost enables co-funding of up to 75% of pay increases for workers earning a gross wage of up to $2,500 per month in 2023.

However, this co-funding will gradually taper off by 2026. The increase in the PWC Scheme will benefit many low-wage workers and incentivize employers to provide competitive wages, leading to an increase in productivity and job satisfaction.

By extending these schemes and increasing the funding for the PWC Scheme, the government is demonstrating its commitment to promoting a diverse and inclusive workforce while supporting the needs of businesses in Singapore. These initiatives provide significant financial support to employers and encourage the employment of senior workers while promoting flexible work arrangements and career development.

National Productivity Fund Is Topped Up With S$4 Billion: New Enterprise Innovation Scheme

This new enterprise innovation scheme will provide businesses with funding and resources to develop new products and services that can help them stay competitive in the global market.

The new scheme is expected to benefit many small-to-medium enterprises (SMEs) by providing them with resources to develop innovative products and services, which will enable them to remain competitive in an increasingly digital world. With this fund, business owners will be able to access the tools they need to keep up with changing trends in technology and stay ahead of the competition. Who doesn't love to enjoy better-paying jobs in today's ever-changing economy?

You May Be Eligible To Get A 400% Increased Business Tax Deduction For Key Activities.

Did you know that you may be eligible to get a 400% increased business tax deduction for five key activities? This is an incredible opportunity to save nearly 70% in taxes while investing in innovation.

This deduction applies to five key activities such as:

1. Research and Development;

2. Intellectual property (IP) registration (patents, trademarks, designs);

3. Acquiring and licensing qualifying intellectual property (IP) rights, as long as business revenue is less than $500 million;

4. Collaborating with polytechnics and ITE. Enterprises can receive funding of up to $50,000 for innovation projects conducted in partnership with these institutions; and

5. Enhancing and taking advantage of the SkillsFuture Singapore and Skills Framework initiatives.

These programs offer a wide range of approved courses that can help you upskill or reskill in areas such as digital technology, leadership, and communication.

By taking advantage of this larger tax deduction, businesses can reduce their taxable income and increase their bottom line.

Providing More Financial Support To Both Large And Small, Promising Domestic Organizations.

The Singapore government has pledged $1 billion under the Singapore Global Enterprise (SGE) initiative to support the growth and development of large, promising local businesses.

This initiative also aims to assist these businesses in securing the necessary resources to execute their growth plans, which includes financing, business networks, and access to new markets. Furthermore, the SGE initiative is designed to build research and innovation capabilities within these companies, enabling them to stay competitive and at the forefront of their industries.

In addition to the SGE initiative, the Singapore government has set aside another $150 million under the SME Co-Investment Fund to support growth-oriented, promising small and medium-sized enterprises (SMEs). The SME Co-Investment Fund is part of a wider initiative to nurture and develop local companies, both large and small, to help them develop new capabilities and scale beyond Singapore.

These schemes demonstrate the government's commitment to supporting the growth of Singapore's businesses, particularly those with the potential to become major players in the global market.

Want to find out more? Visit Enterprise Singapore for full read.

Corporate Income Tax Changes. What Is Base Erosion And Profit Shifting Initiative (BEPS 2.0)?

Attention, multinational enterprise (MNE) groups! As of January 1st, 2025, there will be a significant change to the way corporate income tax is calculated for large MNE groups under the Global Anti-Base Erosion rules. This is part of the Base Erosion and Profit Shifting (BEPS) initiative, known as Pillar 2, which aims to prevent multinational corporations from avoiding tax by shifting profits to low-tax jurisdictions.

We know that MNEs play an important role in driving economic growth, and we recognize the importance of creating a fair tax system that benefits both businesses and the wider community. By implementing these rules, the aim is to level the playing field and ensure that all MNEs, regardless of their size or location, pay their fair share of taxes.

Under GloBE, a domestic top-up tax (DTT) is implemented that complements the existing corporate income tax system. This means that large MNE groups will be required to pay a minimum level of tax in each jurisdiction they operate in. By doing so, Singapore can prevent MNEs from artificially shifting profits to low-tax countries and ensure that they contribute their fair share of tax to the jurisdictions in which they operate.

Read also: Singapore Income Tax: Filing Employee Earnings


In conclusion, Singapore's Budget 2023 provides businesses with a range of tax incentives and financial assistance to help them grow and develop. These include the 400% increased business tax deduction for five key activities, the Singapore Global Enterprise initiative to support large local businesses, and the SME Co-Investment Fund to support small and medium-sized enterprises.

Additionally, the government has implemented the Base Erosion and Profit Shifting Initiative (BEPS 2.0) to ensure that companies pay their fair share of taxes. With these measures in place, businesses can benefit from reduced taxes while investing in innovation and upskilling their employees.

Frequently Asked Questions

What is the Singapore Global Enterprise initiative?

The Singapore Global Enterprise (SGE) initiative is a government-led program to support large local businesses in their efforts to expand and grow beyond Singapore. It provides financial assistance, tax incentives, and other support measures to help companies scale up and become major players in the global market.

What is the SME Co-Investment Fund?

The SME Co-Investment Fund is a government initiative to support small and medium-sized enterprises (SMEs) in Singapore. It provides financial assistance, tax incentives, and other support measures to help SMEs grow and develop.

What is the Base Erosion and Profit Shifting (BEPS) initiative?

The Base Erosion and Profit Shifting (BEPS) initiative is a global effort to combat tax avoidance by multinational corporations. It includes measures such as the implementation of a domestic top-up tax (DTT), which requires large MNE groups to pay a minimum level of tax in each jurisdiction they operate in.

Read also: Introducing Unemployment Support In Budget 2023? What Can We Expect

Read also: All You Need To Know About Employee Training Grants In Singapore
Read also: SINGAPORE BUDGET 2021: What SMEs Need To Know


Got a Question?

WhatsApp Us, Our Friendly Team will get back to you asap :)

Share with us your thoughts by leaving a comment below!

Stay updated with the latest business news and help one another become Smarter Towkays. Subscribe to our Newsletter now!

UPDATED AS OF 15 Jun 2024
Lowest Business Banking Facilities
Lowest SME Working Capital Loan (WCL) Rate
Per year
Lowest Business Term Loan Rate
Per year
Lowest Home Loan Rate
Per year
Lowest P2P Biz Loan Rate
Per month
Lowest Commercial Property Rate
Per year

Find the Best Loans, Insurance & Credit Cards

Get Our Weekly Newsletter

We value your privacy. We never share your email with 3rd parties. Unsubscribe at any time.