Singapore launches AI support measures, tax breaks in 2026 Budget

Singapore has launched a slew of schemes to harness AI, including tax breaks for companies and support for workers to learn AI skills.

Prime Minister Lawrence Wong, while presenting the country’s budget on Thursday, announced that Singapore will launch a “National AI Council”, which he will chair.

“AI is a powerful tool – but it is still a tool. It must serve our national interests and our people,” he said.

Singapore will also set clear rules for how AI can be developed and used to ensure society benefits safely and responsibly, Wong added.

In terms of measures, Singapore will launch a new program called “AI Champions” to support companies that want to use AI to transform their businesses. Support will be tailored to each company and will include enterprise transformation and workforce training.

“As these companies succeed, they will set standards for their industries and inspire others to follow,” Wong said.

The country will also expand its Corporate Innovation Program, which provides companies with a 400% tax deduction on eligible expenses. These expenditures will be expanded to include artificial intelligence expenditures, up to a maximum of S$50,000 ($39,654) annually for 2027 and 2028.

“Every Singaporean can take the initiative to learn and acquire AI-related skills,” Wong said, adding that the country will redesign its Skillsfuture website to make AI learning paths clearer and easier to access, so Singaporeans can quickly find courses that match their work needs and proficiency levels.

Skillsfuture provides educational opportunities and training support to Singaporeans, who receive credits to enroll in Skillsfuture courses when they turn 25.

But Wong noted that while most AI tools are free at a basic level, access to more advanced models requires a paid subscription.

Singapore will then provide Singaporeans attending selected AI training courses with six months of free access to premium AI tools. “This will allow them to practice, experiment and apply what they have learned,” he noted.

While AI has become a key driver of Singapore’s digital economy, its adoption alone does not guarantee productivity gains, according to Jessica Chang, senior vice president for Asia Pacific at business services firm ADP.

Zhang added that without job redesign and hands-on training, the shift to AI risks widening skills gaps and undermining long-term talent development.

As such, she believes a key challenge will be equipping workers with the skills needed to work effectively alongside AI, rather than simply introducing new tools.

“Accessible learning pathways, regular exposure to AI, and targeted skill upgrading that promote critical thinking, data literacy, and communication capabilities are likely to deliver greater impact than broad-based training alone.”

EQDP has been one of the factors behind Straits Times Index It rose in 2025. The STI rose 22.67% in 2025, its biggest gain since 2009.

S$4 billion has already been allocated to nine asset managers, with the remainder expected to be distributed in the second quarter of 2026.

Wong also said the government will look to implement other measures to boost the market, such as simplifying listing rules and requirements to make it easier for high-growth companies to go public and creating a dual listing bridge linking the SGX and Nasdaq.

“These measures will enhance the depth and vitality of our public equity market and provide more pathways for companies to grow and expand from Singapore,” Wong said.

Deloitte Singapore head of private tax, Klein Yeo, said he expects the addition of S$1.5 billion to “increase liquidity in the Singapore stock market”, adding that he expects an increase in high-growth private companies in Southeast Asia that will consider Singapore as their preferred listing destination in the coming years.

Wong attributed the 2025 surplus to… Better than expected economic performanceAs well as higher corporate income tax collections.

The country has also seen a rise in asset-related revenue collections, such as vehicle taxes and stamp duty. This is due to strong demand for private vehicles and properties, Wong added.

The fiscal surplus was “prudent,” Chua Hak Bin, regional co-head of research at Maybank Investment Banking Group, told CNBC, noting that since it is the first year of this government’s electoral term, the administration wants to maintain some “dry powder” in case of any unexpected shock or downturn.

Under Singapore’s constitution, the administration must maintain a balanced budget in each term of government, and can only tap past reserves with the approval of the president. The government may not borrow to finance its operating expenses.

Singapore has only used its previous reserves on two occasions: during the 2008 global financial crisis and the Covid-19 pandemic.

“Revenue forecasts are usually conservative, and like previous budget forecasts, the actual fiscal surplus for FY2026 is likely to come in higher,” Chua added.