Singapore Budget 2023 Highlights

Singapore Budget 2023 Highlights

On 14th February 2023, Finance Minister Lawrence Wong announced Singapore’s 2023 budget. While previous statements maintained a strong focus on recovery from the Covid-19 pandemic, this fiscal budget turned attention towards rising inflation, and protecting Singaporian nationals and businesses from increased living and energy costs.

Singapore Budget 2023: Moving forward in a new era

Centred on the theme ‘Moving forward in a new era’, the statement drew on the positive position of the nation in the aftermath of the global pandemic. Through a turbulent economic period, Singapore’s economy grew by 3.6% in 2022, with the unemployment rate dropping below pre-pandemic levels for the first time since 2020.

The nation expects this positive trend to continue in 2023, with predicted growth of between 0.5% and 2.5% to the overall economy. Read on for a full summary of the statement’s key takeaways.

Goods and Services Tax (GST)

Between 2020 and 2022, Singapore leaned on $40 billion of past reserves to fund Covid-19 action and recovery. In an effort to safeguard these funds – while acknowledging the slim chances of being able to recover them fully – the government will progressively increase the country’s Goods and Services Tax (GST), from 7% to 8% in 2023, and 8% to 9% in 2024.

Mindful of the challenges this could present to lower and middle income Singaporeans, the rise will be accompanied by a variety of enhancements to existing support schemes, including:

  • Enhancements to the GST Voucher scheme (GSTV); increasing the cash payouts to $700 for those residing in homes with annual values of $13,000 and below, and $350 for those living in homes with annual values of between $13,000 - $21,000. Each band will be subject to an additional increase in 2024, to $850 and $450 respectively
  • Enhancements to the Assurance Package (AP) to provide greater transitional support through the GST rise, including an increase of between $300 - $650 in AP payments for eligible applicants
  • An increase in CDC vouchers to $300 in 2024

Cost of living support

To support more immediate cost-of-living challenges, the Singapore government will introduce:

  • A Cost of Living Special Payment of $200 - $400 for eligible adult Singaporeans
  • A Cost of Living Senior’s Bonus of $200 - $300 for eligible nationals aged 55 and above
  • A doubling of U-Save rebates, allowing eligible households to receive up to $760 in 2023

For households with children, the budget will include:

  • A $400 top-up to the Child Development Accounts of children aged six and below
  • A $300 top-up to the EduSave or Post-Secondary Education Accounts for children aged 7 and over

Support for businesses

To help businesses navigate rising energy costs and tighter financial conditions, the budget also included:

  • An extension of enhancements to the Enterprise Financing Scheme to 31 March 2024. These include a 70% Government risk-share for trade loans and additional support for domestic construction projects
  • An extension of the Energy Efficiency Grant to 31 March 2024. This grant helps businesses in the food services, food manufacturing, and retail sectors to invest in efficient energy solutions to reduce the impact of high electricity prices

Support for workers

Acknowledging the inevitable future increases in inflation over the coming years, the statement focused on areas to increase the productivity of the workforce so that Singaporeans can earn more. This included:

  • Strengthening the SkillsFuture network to support career progression and employment outcomes
  • Introducing ‘Job-Skills Integrators’ to help identify and sync up industry skills requirements and training opportunities
  • Additional support to lower wage workers to help them achieve better progression, the budget maintains the 2022 increase to the Government’s co-funding share of the Progressive Wage Credit Scheme, as well as topping up the fund by $2.4 billion
  • Enhancing the Enabling Employment Credit for People with Disabilities to cover a larger percentage of wages for longer time periods – applicable to those who have not been working for 6 months or more
  • Introducing a new Uplifting Employment Credit, offering a time-limited wage offset to employers who hire ex-offenders

As well as additional support to senior workers who wish to keep working:

  • Extending the Senior Employment Credit to 2025 - enabling wage offsets for employers that hire older workers
  • Extending the Part Time Re-Employment Grant to 2025, encouraging employers to offer more flexible working arrangements to employees, including senior workers

Increasing investment

The 2023 budget also maintained a key focus on attracting investment in key growth sectors such as finance, transport, logistics and manufacturing, as well as encouraging multinational enterprises (MNEs) to base regional or global operations in Singapore.

To support this effort, the statement included:

In addition, the statement introduced a new Enterprise Innovation Scheme designed to enhance tax deductions from 250% to 400%* across the following activities:

  • R&D carried out in Singapore
  • Registration of intellectual property (IP), including trademarks, designs and patents
  • Licensing of IP rights
  • Innovation in polytechnics and ITE
  • Training courses approved by SkillsFuture Singapore

*capped at $400,000, $50,000 for Polytechnics and ITE

To help waver startup and innovation costs, businesses yet to make a profit will have the additional option to convert 20% of their qualifying expenditure to a cash payout of £20,000.

For growing enterprises, wider support will include:

Social impact

Led by Singapore’s well-established ForwardSingapore initiative, social impact and change also maintained a key focus of the 2023 budget.

As well as enhancing a variety of measures to support young families in buying property and handling childcare, the statement included:

In support of the country’s pursuit of net zero carbon emissions by 2050, acknowledgement was given to the enhanced measures to tackle climate change, including:

  • Progressive increases to Singapore’s carbon tax over the coming years
  • Increased support to enterprises and households to help them become more energy efficient
  • Further investment into green buildings and electric vehicles
  • Increased adoption of renewable energy solutions such as solar, hydrogen and regional power grids
  • $5 billion investment into to a new Coastal and Flood Protection Fund


In 2022, Singapore raised its personal income tax for top earners as well as increasing property tax rates for higher-value owner-occupied residential properties and all non-owner-occupied residential properties.

This year, there will be no further increases to income or property tax rates, but Buyer’s Stamp Duty Tax will increase to 5% for all residential properties (6% for properties over $3 million) and 4% for all non-residential properties (5% for all properties over $1.5 million).

Corporate tax

As a member of the OECD Inclusive Framework on Base Erosion and Shifting (BEPS 2.0), Singapore will be affected by Pillar 2 of this agreement, stipulating a global minimum tax rate of 15% for all MNEs with a turnover of $750 million and over. This will take effect from 2025, supported by a Domestic Top-up tax to bring up the effective tax rate of MNE groups in Singapore to the required 15%.

Singapore 2023 budget summary

Overall, Singapore’s 2023 budget maintained a key focus weathering the new challenges brought on by growing inflation. However, safeguarding the country’s fiscal reserves remained a key strategic priority. This will be pursued via progressive tax increases in the short term, alongside wider skills development opportunities to strengthen the Singaporean workforce in the long term.

Watch the full 2023 budget statement or look back on Singapore’s 2022 budget highlights here.

For more information on Singapore’s tax and payroll system, browse activpayroll’s dedicated Global Insight Guide to Singapore. Or, for news and updates on the wider global payroll landscape, visit our latest news page.