How do the Big Four read Budget 2026’s AI drive?

They cite $1.5b fund boost and 400% AI tax break as Budget 2026 accelerates adoption.

Singapore’s Budget 2026 underscores a bold push for artificial intelligence, with national AI missions taking centre stage alongside measures supporting businesses and workers, according to the Big Four accounting firms.

Prime Minister and Finance Minister Lawrence Wong highlighted initiatives aimed at accelerating AI adoption, whilst also enhancing support for lower- to middle-income workers and expanding existing business programs.

A standout move is the $1.5b top-up to the Financial Sector Development Fund under the Equity Market Development Programme, reinforcing Singapore’s position as a hub for innovation and enterprise growth.

Liew Nam Soon, EY Singapore and ASEAN managing partner and Asia East deputy regional managing partner at Ernst & Young Solutions LLP, observed that the budget reflects a clear awareness of the times. He noted that it recognises the growing complexity of today’s environment, where geopolitical tensions and rapid technological shifts increasingly intersect, whilst also taking into account the changing aspirations of society.

“Two pivotal priorities stand out: enabling our enterprises and people to translate AI potential into real and meaningful value; and enriching not just livelihoods but every stage of life of Singaporeans as we continue to strengthen our social compact,” Soon said

Daniel Ho, mergers & acquisitions tax leader at Deloitte Singapore and Southeast Asia, said that this year’s budget is a balance between supporting businesses through current economic headwinds and strengthening Singapore’s long-term competitiveness.

“With technological shifts, particularly in artificial intelligence, reshaping markets, this Budget places stronger emphasis on accelerating artificial intelligence (AI) adoption, enterprise digitalisation and workforce readiness, whilst ensuring that Singapore’s tax and regulatory framework remains stable and predictable for investors,” Ho said.

The AI agenda

Peter Liddell, Principal Advisor, head of healthcare and life sciences, and global leader, operations centre of excellence at KPMG in Singapore, said that this year’s priority is focused on the advancement of AI. This underscores the pivotal role of technology and innovation in shaping Singapore’s economic progress.

“By prioritising advancements in AI, especially the AI Mission to help transform four key industry sectors, Budget 2026 positions Singapore as a critical hub for global flows against a backdrop of evolving global geopolitics and economic shifts,” Liddell said.

Kwek SoCheer, partner, digital solutions at PwC Singapore, seconded this saying that there is a need to adopt AI in a more targeted way, particularly 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."

Manik Bhandari, EY Asean data and artificial intelligence leader
Budget 2026 signals a critical shift to making AI literacy a core life skill for Singaporeans. It’s important to make AI work for every worker – to mitigate job anxieties, transition confidently into higher-value roles in an AI-enabled economy, and use AI responsibly. To achieve the intent, Singaporeans must now take initiative, take charge and take advantage of the support measures.

Chai Wai Fook, Partner, tax services at Ernst & Young Solutions LLP
Budget 2026 provides a timely opportunity to strengthen SME competitiveness by sharpening corporate tax measures that directly support AI adoption. Many smaller firms recognise the need to digitalise and embed AI into their operations, but continue to face upfront investment constraints. The expansion of the Enterprise Innovation Scheme that grants a 400% tax deduction on qualifying activities to cover AI-related expenditure for Years of Assessment 2027 and 2028 would lower the barriers to adopting automation, data analytics and intelligent technologies. With the right support, SMEs can scale their AI capabilities more confidently, boost productivity and participate more fully in emerging growth sectors. Budget 2026 can play a catalytic role in ensuring that AI-driven transformation is inclusive and attainable for SMEs across all industries.”

Tan Tay Lek, tax partner at PwC Singapore
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.

Goh Jia Yong, partner, people consulting at Ernst & Young Advisory Pte. Ltd.
“The enhanced support for students and workers to uplift AI literacy and adapt the use of AI in their work will help our workforce maintain relevancy in a changed world. For the adult workforce, the enhancement in SkillsFuture Level-Up Programme to cover part-time training and industry-relevant courses gives flexibility for Singaporeans to upskill whilst balancing work-life commitments.

Shariq Barmaky, country managing partner at Deloitte Singapore
AI has already begun to reshape the work of accountancy professionals. At Deloitte, we have been investing early and deliberately in AI, both in technology and in upskilling our people, so that we can focus on delivering higher‑value audit and advisory work anchored in judgement and human insights. The government’s support in building practical AI capabilities across the professional services sector is a strategic move that will further strengthen Singapore’s position as a leading global hub for professional services. This will enable us to continue fostering a vibrant ecosystem for innovation and talent development, positioning Singapore to serve Asia and the world.

Richard Mackender, indirect tax leader at Deloitte Singapore and Asia Pacific
The Government's approach to AI is optimistic and exciting: taking advantage of the potential in AI whilst seeking to ensure that the benefits are identified and drive good outcomes for Singapore. The fact that the Prime Minister will chair the National AI Council shows how seriously Singapore is taking this opportunity.

Edmund Heng, partner, technology risk at KPMG in Singapore  
Singapore's ambition to be a global trusted AI hub, whilst accelerating AI across sectors, means AI governance will be a core business requirement. Businesses need to implement AI governance measures, leveraging available guidelines from various Singapore government agencies to remain competitive, compliant, and credible. Clear accountability, a risk-based approach, and early governance will be critical for sustainable AI implementation at scale. Good governance empowers AI adoption with confidence, whilst unclear governance hinders it.

Eugenia Tay, personal tax & global mobility services, tax at KPMG in Singapore 
Budget 2026’s support for AI upskilling – including free access to premium tools for a selected period– reinforces Singapore’s push towards adaptability and future readiness. By lowering the expense of reskilling, these measures enable enterprises to boost productivity, accelerate innovation and redesign roles for long-term competitiveness. Ultimately, a future-ready workforce will enable enterprises to capture opportunities in an increasingly AI-driven economy and build Singapore’s key strategic advantage for sustainable growth.

Workforce

Barbara Kinle, partner, personal tax & global mobility services, tax, KPMG in Singapore 
Budget 2026 delivers a timely and forward-looking boost to Singapore’s workforce. The government’s commitment to inclusive growth is clear with the strengthened support for career transitions, expanded upskilling pathways, and renewed focus on helping mid-career and older workers stay competitive.  These measures will help Singaporeans confidently navigate rapid technological shifts with a focus on AI and accelerated automation whilst ensuring businesses continue to access a resilient, future-ready talent pool.

Lily Cheang, partner, people advisory services tax, global immigration at Ernst & Young Solutions LLP
Budget 2026 introduces targeted refinements to Singapore’s foreign manpower regime by adjusting levies and increasing qualifying salaries for both Employment Pass and S Pass holders. These changes reinforce the government’s continued focus towards a higher quality and more competitive workforce. Businesses will need to reassess manpower strategies, manage cost impacts, and deepen local talent development to stay aligned with the evolving requirements.

Christina Karl, immigration leader at Deloitte Singapore and Global
Today’s Budget speech, with the announced increases to the EP and S Pass minimum qualifying salaries (taking effect in January 2027 for initial applications and January 2028 for renewals), is a continuation of Singapore’s broader effort to upgrade the quality of both local and foreign manpower. It reinforces the stance that foreign professionals must come in at salary levels that reflect genuine expertise and productivity, and that they should complement, not undercut, the local workforce.

In the same vein, the higher Local Qualifying Salary (LQS) threshold, which affects how many locals can be counted towards a company’s S Pass quota, further tightens access to lower-cost foreign manpower at the S Pass level. By requiring employers to pay locals at or above the revised LQS before they can avail of the S Pass quota, the Government is nudging firms to invest more meaningfully in their Singaporean core, instead of relying on "token" local hires to support a larger pool of foreign S Pass holders.

Taken together, the EP and S Pass qualifying salary increases, along with the LQS adjustment, convey a consistent policy of complementarity between foreign and local manpower. This ensures that only higher-quality and appropriately paid foreign manpower is brought in whilst safeguarding fair opportunities and wage progression for Singaporeans. This measured approach is consistent with previous Budgets’ emphasis on skills, productivity and a strong local workforce, whilst keeping Singapore open to global talent in areas where deep experience and specialised capabilities are needed to drive innovation and competitiveness

Business support

Chan Wenjie, business tax partner at Deloitte Singapore
The Double Tax Deduction for Internationalisation (DTDi) Scheme is a tax incentive in Singapore that helps companies expand overseas by giving them an automatic 200% tax deduction on up to $150,000 of eligible business expenses related to certain internationalisation activities. The announcement by Prime Minister Lawrence Wong to increase the scope of eligible activities and the expenditure cap from $150,000 to $400,000 sends a strong signal that Singapore remains committed to supporting companies in their internationalisation journey.

Tan Si Ying, partner, corporate tax at PwC Singapore
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.

David Toh, entrepreneurial and private business leader at PwC Singapore
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.

Ajay Kumar Sanganeria,  partner, head of tax at KPMG in Singapore
The 40%corporate income tax rebate will ease the tax burden for all businesses, and benefit even more Small and Medium Enterprises (SMEs) given the cap of $30000. However, it is unlikely to provide immediate relief for companies facing cash flow constraints or those that are loss-making. These firms will need to rely on other assistance schemes for support.

Sustainability and ESG commitments

Amandeep Bedi, partner, climate change and sustainability services at Ernst & Young LLP
The carbon tax ending up at the lower end of the S$50-80 range in 2030 is unlikely to derail Singapore’s energy transition, as businesses have already been embedding decarbonization into their strategies. To maintain momentum, Singapore could complement the tax with targeted measures. For example, setting eligibility criteria to incentivise low-carbon technologies like biomethane-based power in the data centre sector; continuing grants and rebates to accelerate energy efficiency, solar and electric mobility adoption, and engaging neighbouring countries to enable the import of renewable energy. These levers can strengthen the business case for low-carbon projects and create positive spillover effects across other local industries.

Toh Shu Hui, partner, tax services at Ernst & Young Solutions LLP
It is reassuring that Singapore continues to be committed to its energy transition and decarbonisation goals. The move towards a lower end of the range is a pragmatic and calibrated approach to ensure that businesses and the economy will not be unduly burdened by higher operating costs as a result of a higher carbon tax rate, amid global uncertainties and other pressing demands.

Bing Yi Lee, financial services assurance, sustainability and climate change partner at PwC Singapore
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.

Yvaine Gan, global investment & innovation incentives leader at Deloitte Singapore
Singapore’s sustainability push is moving decisively from aspiration to execution. Measures such as mandating sustainable aviation fuel, advancing low‑carbon ammonia bunkering for shipping, and diversifying the energy mix reflect Singapore's unique and pragmatic approach to decarbonisation – one that balances environmental ambition with competitiveness, energy security and long‑term economic resilience. The government can further complement this by using fiscal incentives that go beyond mandates, including greater flexibility under schemes like the Refundable Investment Credit and the Energy Efficiency Grant, to support broader sustainability outcomes.

Wong Meng Yew, sustainability and climate tax leader at Deloitte Southeast Asia
Whilst Budget 2026 did not provide a concrete number for the carbon tax to be implemented in 2028, the Government has acknowledged concerns that the trajectory of an increase towards a $50 to $80 per tonne range by 2030 may have a dampening effect on Singapore's competitiveness, considering that we already have the highest carbon tax rate in Asia. It is thus a welcome move that there are plans in place to review this range towards the lower end in 2028, to allow companies to ease their tax expenditure whilst continuing their decarbonisation efforts.

Mark Addy, partner, energy & natural resources at KPMG in Singapore
It is encouraging to hear that the government remains committed to its climate strategy despite slowing global momentum.  With carbon tax already at $45/tonne, the importance of maintaining competitiveness regionally and globally cannot be overstated. Monitoring international developments before committing to the next carbon tax rate rise is a sensible approach.

Lim Wen Bin, partner, infrastructure advisory at KPMG in Singapore 
Budget 2026 sends a clear message that Singapore remains serious about climate action.  Setting the carbon tax at S$45 per tonne in 2026 and 2027 makes it the highest in Asia. Noting that future rates could land at the lower end of the S$50-S$80 range if global climate action weakens reflects the country’s calibrated approach.  Nonetheless, Singapore remains steadfast in its climate commitments, pacing its ambitions in line with global developments. Singapore’s energy transition will continue to advance, but the Government is clear that this will not be at the expense of economic competitiveness.