PwC’s response to Singapore Budget 2026 on 12 February

For immediate release - Singapore, 12 Feb 2026 – The following comments are responses from PwC Singapore on the Singapore Budget 2026:

On AI

"To harness the potential of AI, the Singapore Government is supporting local businesses to defray costs of adopting AI by offering 400% tax deductions on qualifying AI expenditure capped at $50,000 through the Enterprise Innovation Scheme. While this is done to further the national AI agenda by getting local enterprises to explore the deployment of AI in their businesses, more clarity is needed on what constitutes “qualifying AI expenditure” to avoid abuse in making tax deduction claims."

- Lennon Lee (Mr), Tax Leader, PwC Singapore (李柯龙, 普华永道新加坡税务主管合伙人)

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"Singapore’s continued early bet on frontier technologies, exemplified by hosting the latest quantum computer by Quantinuum and collaborations with global experts in quantum research, demonstrates a strategic commitment to technological leadership. This quantum initiative not only enhances Singapore’s innovation ecosystem, but also complements its AI ambitions by laying the groundwork for next-generation AI research and computational capabilities."

- Anthony Dias (Mr), AI Hub Leader, PwC Singapore (普华永道新加坡人工智能中心负责人)

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"This year’s Budget recognises the need to support Singapore businesses to adopt AI in a more targeted way, with initiatives such as the Champions of AI Programme for relatively mature enterprises and the Enterprise Innovation Schemes for those in the early stages of their AI journey."

- Kwek So Cheer (Mr), Digital Solutions Partner, PwC Singapore (郭首佳, 数字方案合伙人, 普华永道新加坡)

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"The expansion of the EIS to include further deductions for qualifying AI expenses should encourage businesses to seriously evaluate AI adoption in their operations, if they have not already started. $50,000 is a meaningful amount, particularly to smaller businesses, to help kickstart their AI journey."

- Tan Tay Lek (Mr), Tax Partner, PwC Singapore (陈体力, 普华永道新加坡税务合伙人)

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"It is encouraging to see how the Government has practically segregated its AI strategy for the workforce, students, everyday Singaporeans and businesses, to better diffuse AI into daily life. Adding on this, continued growth of initiatives like LorongAI, a uniquely Singapore-style community aggregating Government, industry and research in collaboration, alongside the new AI Hub serves as a beacon of inspiration to further propel Singaporeans forward in our AI journey."

- Kexin Lim (Ms), Partner specialising in Tax and Entrepreneurial and Private Business, PwC Singapore (林可芯, 普华永道新加坡私营及初创企业服务部税务合伙人)

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"Expanding the Productivity Solutions Grant (PSG) to include a wider range of AI and AI-enabled tools will help defray the costs relating to adopting AI. This expanded list will need to be refreshed regularly, given how fast technology advances now."

- Kwek So Cheer (Mr), Digital Solutions Partner, PwC Singapore (郭首佳, 数字方案合伙人, 普华永道新加坡)

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"The National AI Council will transform the Singapore economy and the priority sectors of Advanced Manufacturing, Connectivity & Logistics, Finance, and Healthcare which in turn will lead to the transformation of adjacent sectors as well. Thus, businesses not directly in these priority sectors can expect to be pulled along in this transformation journey."

- Kwek So Cheer (Mr), Digital Solutions Partner, PwC Singapore (郭首佳, 数字方案合伙人, 普华永道新加坡)

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"I'm heartened to know that Connectivity & Logistics is one of four sectors that the new National Artificial Intelligence (AI) Council chaired by PM Lawrence Wong will focus on. It shows the importance of our Transportation & Logistics (T&L) sector to Singapore and that there are productivity and effectiveness benefits to be harnessed. I would like to encourage the T&L sector to embrace AI holistically, tapping on grants such as the EIS and PSG to kick start its AI journey."

- Trilion So (Ms), Transport and Logistics Leader, PwC Singapore (苏 粹 玲, 普华永道新加坡运输与物流业主管合伙人)

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"The announcement of a new set of national AI missions across four key sectors intrinsic to Singapore’s success - advanced manufacturing, connectivity, finance and healthcare - is a courageous and calculated move by the Government to shift the narrative from AI pilots to practical and sustainable digital transformation. Coupled with robust regulatory and governance frameworks, Singapore is pressing ahead with efforts to define its own unique AI journey for our economy and society, powered by AI-powered business model reinvention."

- Charles Loh, Singapore Consulting Leader, PwC South East Asia Consulting (罗国祥, 普华永道新加坡管理咨询主管合伙人)

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"The government's move to pair AI training with six months of premium tool access represents a strategically significant step in accelerating the nation’s transition into an AI‑enabled economy. By giving Singaporeans hands‑on exposure to advanced models—tools that usually require paid subscriptions—they can practise, experiment and truly apply what they learn, becoming AI‑fluent rather than AI‑dependent. This is exactly the kind of practical capability building that will strengthen employability and position Singapore as a global testbed for responsible and efficient AI integration.”

- Parul Munshi (Ms), Asia Pacific Workforce Leader, PwC South East Asia Consulting (区域可持续发展、东南亚咨询业务主管合伙人，普华永道新加坡)

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On Workforce Transformation

"Increasing the minimum qualifying salary for new applicants for Employment Pass and S Pass for foreign workers in 2027, coupled with potential higher work permit levies, can result in higher operating costs for some segments of the economy that rely heavily on foreign workers, including service, F&B and the retail industry. Given the tight local labour market, a key question is whether these businesses will eventually have to passon the higher costs to consumers?"

- Lennon Lee (Mr), Tax Leader, PwC Singapore (李柯龙, 普华永道新加坡税务主管合伙人)

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"Singapore’s timely push to make AI upskilling accessible can translate learning into on-the-job productivity by pairing clearer SkillsFuture pathways with six months of premium tool access, strengthening the nation’s talent pool and SME capabilities. To optimise impact, Singapore should set measurable outcomes, enable mentorship and build communities of practice, and provide targeted SME support, underpinned by data, IP, and Responsible AI guardrails."

- Ding Suk Peng (Ms), Workforce Tax Leader, PwC Singapore (陈素萍, 普华永道新加坡人才与税务咨询主管合伙人)

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"The acknowledgement of workers’ anxieties due to AI transformation is reassuring. A redesigned SkillsFuture site that makes AI courses easier to access, as well as a free six-month subscription to premium AI tools after the training, is a good start. This new design will be very important and, beyond being simple to use, should ideally include an element of personalisation to guide the worker in his/her personal AI upskilling journey."

- Kwek So Cheer (Mr), Digital Solutions Partner, PwC Singapore (郭首佳, 数字方案合伙人, 普华永道新加坡)

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The increase in Local Qualifying Salary to S$1,800 is a direct boost for lower income Singaporeans and ties firms’ access to foreign manpower to fairer pay for locals. By strengthening this wage floor, employers are nudged to redesign roles, invest in basic productivity tools, and offer more predictable hours so that entry level work is dignified and sustainable.

- Ding Suk Peng (Ms), Workforce Tax Leader, PwC Singapore (陈素萍, 普华永道新加坡人才与税务咨询主管合伙人)

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"The merging of SkillsFuture Singapore and Workforce Singapore as a single entity offers a stronger and more coordinated approach for the Government to tackle head-on the immense challenges of job restructuring, upskilling and future proofing the city state's jobs-skills ecosystem. Jobs and skills are inalienable components in today's world of work; this move will enable a singular agency to focus on fortifying Singapore's workforce transformation policies to build a future-ready labour force."

- Martijn Schouten (Mr), Workforce Transformation Leader, PwC South East Asia Consulting
(普华永道东南亚管理, 咨询人才和组织变革主管合伙人)

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"Whilst strengthening AI literacy in Institutes of Higher Learning (IHLs) is important, pairing this initiative with internships programmes in enterprises will be critical to ensure that the literacy is grounded in practical applications and tangible outcomes."

- Kwek So Cheer (Mr), Digital Solutions Partner, PwC Singapore (郭首佳, 数字方案合伙人, 普华永道新加坡)

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On Enhancing Equity and Capital market - Startup SG Equity Scheme, Anchor Fund, Financial Sector Development

"Ramping up support to not just early-stage startups, but also growth-stage companies, helps to increase the probability of Singapore enterprises becoming world beaters. Positioning Singapore as the leading centre for growth capital can create a virtuous cycle: more enterprises based here succeed and scale, in turn increasing the demand for public listings in Singapore."

- Patrick Yeo (Mr), Markets Leader, PwC Singapore (杨显聪, 普华永道新加坡市场主管合伙人)

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"The government’s S$1.5 billion expansion of the Equity Market Development Programme is very welcome news for the asset management industry. It will meaningfully strengthen the development of the local ecosystem, and as Singapore’s capital markets continue to deepen, it will create clearer exit pathways for private markets participants in the years ahead. Taken together, these measures further reinforce Singapore’s position as a leading global asset and wealth management hub."

- Paul Pak (Mr), Asia Pacific and Singapore Asset and Wealth Management Leader, PwC Singapore (普华永道新加坡资产和财富管理主管合伙人)

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"Many SMEs will welcome the move away from pre‑fixed solution bundles, as the added flexibility better reflects sector‑specific realities and varying levels of SME maturity. From an SME’s perspective, the enhanced PSG represents a meaningful upgrade in both intent and impact. However, this flexibility also raises expectations—SMEs must now make smarter, more deliberate choices. Ultimately, the enhancements send a strong signal of commitment, but they will favour SMEs that are focused, disciplined, and strategic in their transformation approach."

- David Toh (Mr), Entrepreneurial and Private Business Leader, PwC Singapore (杜成宏, 普华永道新加坡私营及初创企业服务部主管合伙人)

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"The latest budget initiatives, including the $1.5 billion infusion into both the Anchor Fund and Financial Sector Development Fund, signal a strong government commitment to invigorate the equities market. Together with the other measures from the Equity Market Review Group, institutional participation is set to rise, creating attractive opportunities for companies eyeing IPOs. Businesses with capital markets ambitions should seize this moment by strengthening governance and investor relations, and ensuring market readiness. This alignment will not only facilitates successful market entry, but also enhances the overall vitality of Singapore's capital markets."

- Jimmy Seet (Mr), Capital Markets Partner, PwC Singapore (薛家全, 普华永道新加坡资本市场合伙人)

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"Significant injection of an additional $1billion into Startup SG Equity is a strong signal of Singapore’s commitment to nurturing innovation through times of disruption and uncertainty. By extending support beyond early‑stage ventures to include growth‑stage companies alongside Singapore's current schemes to attract high quality entrepreneurs, the scheme strengthens the startup pipeline and reinforces Singapore’s position as a leading hub for scale‑up capital."

- Kexin Lim (Ms), Partner specialising in Tax and Entrepreneurial and Private Business, PwC Singapore (林可芯, 普华永道新加坡私营及初创企业服务部税务合伙人)

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"Budget 2026 signals a deliberate shift from funding start‑ups to engineering a full capital‑formation lifecycle in Singapore. By expanding Startup SG Equity to cover both early‑stage and growth‑stage companies, strengthening the Anchor Fund and EQDP for pre‑IPO and public‑equity investment, and streamlining SGX listings alongside the SGX–Nasdaq bridge, the Government is not just supporting innovation – it is systematically building an end‑to‑end pipeline from venture creation to global capital‑markets access.

The effect is two‑fold. First, SGX becomes a more attractive venue for listings and investor participation, giving retail investors better access to Singapore and regional champions and reinforcing IPOs as a core pathway for PE and VC exits. Second, founders and corporates gain access to a deeper, more integrated pool of capital across private and public markets. Overall, this materially enhances Singapore’s positioning as a regional listing hub while deepening its enterprise ecosystem and long‑term value creation."

- Girish Sahajwalla (Mr), Southeast Asia Corporate Finance Leader, PwC Singapore (普华永道新加坡东南亚区企业融资与并购主管合伙人)

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"The adjustment to the Corporate Income Tax Rebate with the maximum rebate lowered to $30,000 and minimum benefit reduced to $1,500 is a clear manifestation of this Budget’s pivot to more deliberate channelling of resources towards targeted, strategic priorities."

- Tan Si Ying (Ms), Partner, Corporate Tax, PwC Singapore (陈思颖, 普华永道新加坡企业税务合伙人)

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On Internationalisation, trade and attracting foreign MNCs

"From an SME point of view, the internationalisation grant enhancements are likely to be seen as timely, pragmatic, and confidence‑boosting. They lower financial and execution barriers, encourage longer‑term commitment to overseas markets, and recognise the realities SMEs face when competing internationally. In doing so, they position international growth as a viable next step for a broader base of Singapore enterprises."

- David Toh (Mr), Entrepreneurial and Private Business Leader, PwC Singapore (杜成宏, 普华永道新加坡私营及初创企业服务部主管合伙人)

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"Although it is heartening to hear that the Singapore government will continue to enter into new trade agreements of all kinds – goods, services, digital, and so on – the inevitable patchwork of smaller and narrower agreements may make it even harder for Singapore’s exporters of goods and services to navigate them efficiently and effectively. Harnessing appropriate technology to identify and select the best new trade corridors to pursue will distinguish the champions from the also-rans."

- Frank Debets (Mr), Asia Pacific Customs and Trade Leader, PwC Singapore (亚洲国际贸易服务主管, 普华永道)

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"Expanding the Market Readiness Assistance (MRA) grant to support Singapore companies to grow in overseas markets where they are already active, rather than only in markets new to them, should lead to a higher take-up rate. Expanding it further to companies that only operate within Singapore but support other companies that export from Singapore could potentially have an even bigger impact."

- Frank Debets (Mr), Asia Pacific Customs and Trade Leader, PwC Singapore (亚洲国际贸易服务主管, 普华永道)

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"Traditionally, EDB has used tax incentives with stringent eligibility criteria to attract foreign MNCs to set up operations in Singapore. Attracting high-growth companies early in their growth trajectory will require a different approach, and it is hoped that EDB will tweak its incentive toolkit to better cater to their specific situations."

- Irene Tai (Ms), Energy, Utilities and Resources, Transport and Logistics Tax Leader, PwC Singapore (戴春凤, 普华永道新加坡能源、公用事业与资源及运输与物流业税务主管合伙人)

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"In the past, businesses may not have been sufficiently motivated to utilise the Double Tax Deduction for Internationalisation scheme, given the administrative efforts needed to maintain documentation to support the claim. With the raising of the cap to S$400,000 and the broadening of qualifying activities for automatic deduction claims, hopefully more businesses will be motivated to leverage this scheme. Businesses can also consider the use of AI to help manage the administrative and documentation efforts."

- Irene Tai (Ms), Energy, Utilities and Resources, Transport and Logistics Tax Leader, PwC Singapore (戴春凤, 普华永道新加坡能源、公用事业与资源及运输与物流业税务主管合伙人)

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"The Government’s move to broaden the scope of qualifying activities under the Double Tax Deduction for Internationalisation Scheme and raise the automatic deduction cap to $400,000 is a strong signal that Singapore is strategically empowering businesses to compete on the global stage. By reducing the tax burden on crucial market expansion, this enhancement will help domestic firms, especially SMEs, absorb upfront costs and gain confidence to chart more ambitious international growth trajectories in an increasingly competitive world."

- Tan Si Ying (Ms), Partner, Corporate Tax, PwC Singapore (陈思颖, 普华永道新加坡企业税务合伙人)

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On ESG

"Budget 2026 sends an unambiguous signal that Singapore's climate commitments are unwavering, but not unrealistic. The emphasis is on tangible solutions and innovation in areas of key national interests such as energy and transport/aviation resilience, paced in line with global realities and calibrated for competitiveness. These messages provide clear policy certainty underpinning long-term decarbonisation investments, and businesses should make use of available support schemes, including the extended Energy Efficiency Grant and Enterprise Financing Scheme – Green (EFS-Green), to build resilience and competitive advantage, in line with Singapore’s long‑term policy direction."

- Bing Yi Lee, Financial Services Assurance, Sustainability and Climate Change Partner, PwC Singapore (李秉义, 普华永道新加坡金融业审计及可持续发展与气候变化合伙人)

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On CPF

"Implementing investment products tailored for CPF members with a higher risk appetite, especially younger members with a longer runway until retirement, is highly welcomed. Since investing is not always a walk in the park, developing life-cycle investment products that keep fees low and are easy to understand are essential to help enable CPF members who wish to manage their own investments."

- Marcus Kok (Mr), Principal Pension Consultant, PwC Asia Actuarial Services (郭文傑, 普华永道亚洲精算咨询服务首席退休金顾问)

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