FACILITATING mergers and acquisitions (M&A) and extending wage cost relief schemes are among 17 recommendations proposed by PwC and the Singapore Business Federation (SBF) to support local businesses, ahead of Budget 2025.
Prime Minister and Finance Minister Lawrence Wong is set to deliver the Budget statement on Feb 18.
In their joint wishlist released on Thursday (Jan 16), PwC and SBF outlined suggestions across four areas. The first set of recommendations focused on helping businesses scale their operations and enter new markets.
Here, PwC and SBF proposed enhanced funding to assist companies with manpower transitions during M&A or joint ventures.
For example, they suggested raising salary support under the Career Conversion Programmes from 70 per cent to 90 per cent – capped at S$7,500 monthly – for companies engaged in such activities.
Other proposals included introducing legislation to facilitate cross-border mergers and allowing industrial landlord JTC to consider M&A-related costs as qualifying investments during lease renewals.
M&A provides an “expedient way” for Singapore companies to scale up their capabilities, PwC and SBF noted.
To address small and medium-sized enterprises’ (SMEs) financing needs, they suggested that the government collaborate with trade associations and chambers to create industry-specific financing solutions.
This could involve establishing advisory centres to guide SMEs on alternative funding sources such as private equity and angel investors.
Workforce transformation
Another set of recommendations for Budget 2025 looked at supporting workforce transformation through job-redesign initiatives.
PwC and SBF proposed introducing an Enterprise and Workforce Transformation Grant, capped at S$100,000 per company.
This grant could support objectives such as digitalisation, productivity enhancements, job redesign and employee training, they said. To ensure effective utilisation, a structured “wallet system” providing time-limited access to funds could be implemented.
Companies seeking the grant would need to submit a detailed transformation plan, potentially developed with the assistance of a qualified adviser, PwC and SBF suggested.
In addition to introducing grants, they also recommended expanding existing schemes such as the Productivity Solutions Grant.
Currently designed to help businesses adopt pre-approved IT solutions and equipment, the grant could be broadened to cover a wider range of job-redesign costs, PwC and SBF said.
Examples include funding for automation software, flexible work solutions, and a shift from a per-company grant limit to a per-project cap, to better align with businesses’ specific needs.
Lowering business costs
The third set of proposals dealt with reducing business costs and improving operational efficiencies, which PwC and SBF said are key to fostering a more competitive business environment. This includes deepening Singapore’s capital markets and supporting SMEs.
To encourage more companies to list on the Singapore Exchange, they proposed introducing a concessionary tax rate on income generated by newly listed companies during their initial years.
They also suggested tax deductions for listing costs and for notional interest on equity capital, as well as streamlining the initial public offering process, which currently can take up to a year.
For SMEs, tender success remains challenging due to complex requirements, extensive documentation, project bundling and delayed payments.
PwC and SBF recommended expanding the Tender Lite initiative – launched in April 2024 to simplify tenders valued at up to S$1 million for general goods and services – to cover additional procurement categories, such as construction and IT services.
Additionally, they called for the government to incentivise larger enterprises to adopt a “Queen Bee” model. Under this approach, tax and financial incentives would be provided to encourage large companies to support SME suppliers in areas such as supply chain management, cybersecurity and sustainability.
PwC and SBF also pointed to the need for “immediate relief” from rising macroeconomic costs.
They proposed a one-off property tax rebate of up to 50 per cent for qualifying non-residential properties in 2025, with a requirement for landlords to pass the savings on to tenants through reduced rentals or direct payments.
To address rising manpower costs, they suggested extending the 50 per cent first-tier support for the Progressive Wage Credit Scheme – from 30 per cent – to this year, helping employers manage mandatory wage increases.
They also recommended deferring the planned increase in S Pass levies – from S$550 to S$650 per month – by a year to alleviate cost pressures.
PwC and SBF proposed extending the corporate income tax rebate introduced in Budget 2024, which provided a 50 per cent rebate capped at S$40,000, for an additional year to support businesses during challenging economic conditions.
Scaling corporate volunteerism
The final set of recommendations were aimed at strengthening Singapore’s social compact through corporate volunteerism.
PwC and SBF proposed the creation of a corporate volunteering office under trade associations and chambers to identify and address gaps in volunteerism processes.
The creation of a unified social responsibility framework could help businesses measure, report and benchmark their social responsibility efforts, they said.
