War-driven cost shocks force 'nimble' $1b intervention for SMEs

Expanding the Energy Efficiency Grant helps all sectors build long term resilience.

Continuous monitoring and targeted support will be critical to strengthening supply chains, maintaining competitiveness, and sustaining Singaporean jobs, according to Tay Hong Beng, Chairman, Singapore Chartered Tax Professionals.

The comments come following the government’s rollout of a series of measures worth $1b to help ease cost pressures for individuals and businesses due to uncertainty from tensions in the Middle East.

Tay said the enhanced corporate tax rebate and wider energy support were timely measures that would ease immediate pressure on smaller businesses whilst helping firms of all sizes strengthen longer-term energy resilience.

He said raising the Corporate Income Tax rebate to 50% was a “nimble move” that would help ease immediate cashflow pressures, especially for SMEs facing sudden cost increases. He also said expanding the Energy Efficiency Grant to all sectors would help firms build resilience against sustained energy price pressures.

According to CGS International, the government widened the corporate tax rebate from 40% to 50% for YA 2026, raised the cash grant component for eligible companies to $2,000 from $1,500, and lifted the total benefits cap for each company to $40k from $30k

The brokerage added that the base tier of the Energy Efficiency Grant, which provides up to $30kin funding support, will be expanded from six sectors to all sectors and extended by another year until 31 March 2028.

The support package comes as supply disruptions and higher prices of energy and raw materials linked to the Iran war threaten to raise business, transport and consumer costs.

It added that the government could review its 2026 GDP growth forecast of 2% to 4% in May and reassess inflation, which is likely to be higher than earlier projected.