Singapore launches AI support measures and tax breaks in Budget 2026

Singapore has launched a series of programs to harness artificial intelligence, including tax breaks for businesses and support for workers to learn AI skills.

Presenting the country’s budget on Thursday, Prime Minister Lawrence Wong announced that Singapore would launch a “national AI council”, which he will chair.

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

Singapore will also set clear rules on how AI is developed and used to ensure it benefits society safely and responsibly, Wong added.

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

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

The country will also expand its business innovation program, which offers businesses a 400% tax deduction on eligible expenses. This will be expanded to include AI spending, capped at S$50,000 ($39,654) per year for 2027 and 2028.

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

The Skillsfuture website provides learning 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 the basic level, access to more advanced models requires a paid subscription.

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

Although artificial intelligence is becoming a key driver of Singapore’s digital economy, its adoption alone does not guarantee productivity gains, according to Jessica Zhang, senior vice president for APAC at payroll and HR services provider ADP.

Without job redesign and hands-on training, the transition to AI risks widening skills gaps and undermining talent development in the long term, Zhang added.

She therefore believes the main challenge will be equipping workers with the skills to work effectively alongside AI, rather than simply introducing new tools.

“Accessible learning pathways, regular exposure to AI, and targeted upskilling that strengthens critical thinking, data literacy, and communication skills are likely to have a greater impact than general training alone. »

EQDP was one of the factors behind the Straits Times Index increase in 2025. The STI climbed 22.67% in 2025, its largest increase since 2009.

SG$4 billion has already been placed with nine asset managers, with the remainder expected to be deployed in the second quarter of 2026.

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

“These measures will strengthen the depth and dynamism of our stock market and provide more opportunities for businesses to grow and expand from Singapore,” Wong said.

Klenn Yeo, head of tax at Deloitte Private in Singapore, said he expects the additional SG$1.5 billion to “boost the liquidity of the Singapore stock market”, adding that he expects an increase in the number of high-growth private companies in Southeast Asia that will view Singapore as their listing destination of choice in the coming years.

Wong attributed the 2025 surplus to economic performance better than expectedas well as an increase in corporate tax revenues.

The country has also seen an increase in asset-related revenues, such as vehicle taxes and stamp duties. This is due to high demand for private vehicles and properties, Wong added.

Chua Hak Bin, regional co-head of research at Maybank Investment Banking Group, told CNBC that the budget surplus was “conservative”, pointing out that as this is the first year of this government’s election term, the administration would want to keep some “dry powder” in case of an unexpected shock or downturn.

Under the Singapore Constitution, an administration must maintain a balanced budget during each government term and can only draw on previous reserves with the approval of the President. The government is not allowed to borrow to finance its operating expenses.

Singapore has only used its past reserves twice: during the 2008 global financial crisis and the Covid-19 pandemic.

“Revenue projections are generally conservative and, like previous budget forecasts, the actual fiscal 2026 budget surplus is likely to be higher,” Chua added.