SBF, PwC propose IP financing, AI grants for Budget 2026

The Budget recommendations target growth, innovation, and workforce support.

PwC and the Singapore Business Federation (SBF) unveiled their recommendations for the Singapore Budget 2026 at a media conference on 12 January 2026, addressing the city-state’s challenges across five key areas.

The Budget statement is scheduled to be delivered on 12 February 2026 by Prime Minister and Minister for Finance, Lawrence Wong.

“Budget 2026 is a critical opportunity to bridge these gaps so that businesses can continue to create good jobs, anchor high-value activities in Singapore, and compete confidently as ASEAN’s economic flows accelerate,” said Kok Ping Soon, Chief Executive Officer of SBF.

SBF and PwC proposed establishing a centralised digital intellectual property (IP) collateral registry to improve transparency and enable better risk assessment.

They also suggested that Enterprise Singapore’s risk-sharing schemes could be expanded to cover IP-backed financing, with enhanced ratios of 70% to 80% for qualifying transactions.

The organisations recommended integrating government-backed IP securitisation platforms and first-loss guarantees to pioneer IP financing transactions.

The Johor–Singapore Special Economic Zone (JS-SEZ) should also be expanded to include Indonesia’s Riau Islands, creating a more integrated and attractive proposition for global investors, SBF and PwC said.

The organisations further recommended modernising the government’s tax framework by transitioning from purely expenditure-based incentives to outcome-based rewards under the Refundable Investment Credit.

They added that Goods and Services Tax exemptions should be simplified and a new category introduced for Regional HQ Service Providers, facilitating easier talent recruitment for global operations.

SBF and PwC also proposed boosting grants to help small and medium enterprises (SMEs) adopt technology, alongside targeted tax incentives and relief for participating SMEs.

They recommended enhancing the Productivity Solutions Grant (PSG) by integrating artificial intelligence (AI), supporting companies in automating existing processes through IT solutions and equipment, capped at $30,000 per enterprise.

The organisations also suggested implementing sectoral AI pathfinder programmes to create a knowledge hub showcasing best practices and case studies of successful technology adoption.

Expanding the BizAdapt grant to cover compliance and training costs arising from tighter export controls was also recommended, aiming to help businesses adapt to new tariffs through advisory services and reconfiguration, capped at S$100,000 per enterprise.

SBF and PwC proposed leveraging the Enterprise Financing Scheme–Trade Loan, increasing the risk-share from 50% to 70% to 80%, and aligning it with BizAdapt eligibility.

The scheme would be tiered according to enterprise size, growth stage, and operating market.

To manage costs, they recommended raising the carbon credit offset cap from 5% to 10%, while also expanding decarbonisation support through grants, vouchers, and tax allowances.

The carbon tax is proposed to be reduced from $80 to $50 per tonne between 2028 and 2030.

The organisations further recommended establishing a “carbon transition council” to develop sector-specific best practices and roadmaps, leverage procurement to drive decarbonisation, and extend the Enterprise Financing Scheme–Green beyond 31 March 2026.

Stronger public-private collaboration was also advised to develop sector-specific packages for older workers, increasing senior employment and helping SMEs manage health and insurance costs.

The Senior Employment Credit and Part-Time Re-employment Grant provide foundational support but do not fully address sectoral and operational complexities SBF and PwC said in the recommendation.

They added that expanding the Non-Traditional Sources Occupation List to include higher-skilled work permit holders in construction, civil engineering, and logistics would enable companies to manage cost pressures while continuing long-term workforce transformation.

SBF and PwC also recommended maintaining a corporate income tax (CIT) rebate of 50% of income tax payable for all companies, accompanied by a CIT Rebate Cash Grant to help businesses preserve resources for growth, workforce development, and innovation, regardless of tax residency, in the year of assessment 2026.

The organisations proposed extending the Corporate Volunteer Scheme (CVS) to provide upfront seed funding and professional consultancy, bridging gaps in corporate volunteerism.

This is alongside a “Corporate Volunteering Credit Scheme” recognising corporate volunteer contributions.

The extension aims to make skill-based volunteering more attractive than cash donations, lasting five years after 2026, with a significantly higher tax deduction cap of $1m and a 400% deduction rate.

“If Budget 2026 can ease resource constraints and remove friction in areas such as AI adoption, trade, and decarbonisation – while providing companies with the information, certainty, and support they need to make bolder, better strategic decisions – Singapore businesses will be better placed to invest, innovate, and win new markets,” said Marcus Lam, Executive Chairman of PwC Singapore.