Committee of Supply – Head M (Ministry of Finance)

The Chairman: Head M, the Ministry of Finance. Mr Saktiandi Supaat.

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Keeping Fiscal System Prudent and Dynamic

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Chairman, I move, "That the total sum to be allocated for Head M of the Estimates be reduced by $100."

Mr Chairman, in his Budget speech, Prime Minister Wong highlighted that we are entering a post-SG60 chapter of Singapore's development in a world that is becoming more uncertain and more contested. In such an environment, stewardship of our fiscal resources becomes even more critical.

Singapore's fiscal credibility remains one of our strongest foundations. Maintaining prudent budgetary policies and effective governance ensures that we preserve a strong financial base not only for ourselves, but for future generations. This is especially important, giving rising structural spending pressures from ageing, healthcare, climate resilience and security. Globally, many governments are also facing increasingly constrained fiscal positions as these pressures build.

Mr Chairman, but stewardship is not only about restraint. It is also about ensuring that every dollar is used effectively. Prudent governance must therefore be continuous, not episodic.

In this regard, I would like to see clarification from the Minister. How is the Ministry of Finance (MOF) strengthening scrutiny over high-value projects and deepening programme evaluation frameworks to ensure major initiatives deliver measurable outcomes over time? Beyond the initial approval, are there structured review mechanisms to allow resources to be reallocated dynamically, particularly where programmes no longer meet intended objectives or where priorities have shifted? It would be useful if the Ministry could share concrete examples of such re-allocations in recent years.

Mr Chairman, finance should also be a catalyst for innovation and transformation. I therefore welcome efforts to support community partnerships and new delivery models, including through the Singapore Government Partnerships Office. In areas such as ageing, mental health and family resilience, early and preventive interventions can reduce significantly higher downstream costs.

Could the Minister share how MOF evaluates the long-term fiscal impact of such investments? Are there frameworks that go beyond immediate expenditure to capture medium- and long-term cost avoidance as well as broader social returns?

Mr Chairman, as part of responsible fiscal stewardship, we must also periodically review structural features of our tax system. Our system has served us well and we should preserve its fundamental strengths. At the same time, structural parameters should evolve alongside economic realities.

During the recent People's Action Party (PAP) Policy Forum discussions, participants suggested reviewing the income tax relief structures against updated median incomes.

In that same spirit, let me turn to one specific aspect of our tax system – the long-standing provision that effectively exempts the first $20,000 of chargeable income from tax. This framework was introduced in Budget 2002, at a time when GST-related rebates and personal reliefs were consolidated into the tax system to protect lower- and middle-income Singaporeans as we shifted towards greater reliance on indirect taxation.

More than two decades on, the context has changed materially. Median incomes have more than doubled, GST has increased, and cost structures have shifted significantly. Yet the $20,000 threshold has remained unchanged.

In real term, its value has eroded. As incomes rise while thresholds remain static, bracket creep occurs gradually. More lower- and middle-income earners enter the tax space, not necessarily because they are significantly better off, but because the system has not been recalibrated. Otherwise, bracket creep becomes a silent shift in the tax burden – one that is not always visible but is nonetheless felt.

The point is not to call for tax cuts. It is to consider calibration. A periodic review of such structural thresholds can help ensure that the original policy intent of protecting lower- and middle-income earners remains intact. Any adjustments, if considered, can be calibrated and phased and implemented in a fiscally responsible manner. In this way, we preserve both fairness and sustainability.

The Prime Minister already mentioned in his roundup speech that MOF will be looking into it. I really thank him for that. I would therefore encourage the Ministry to, beyond this, periodically assess whether such structural parameters remain appropriately aligned with today's income distribution and tax structure going forward.

Mr Chairman, strong fiscal stewardship requires three things – discipline in how we spend, rigour in how we evaluate, and adaptability in how we design our systems. If we continue to strengthen this, we will not only preserve our fiscal position, but also reinforce trust in our system across generations.

I look forward to the Minister's response.

Question proposed.

The Chairman: Mr Victor Lye.

Managing Capital for a Networked Economy

Mr Victor Lye (Ang Mo Kio): Mr Chairman, as a capital exporter, Singapore should manage our national capital to build a network economy, shifting from a gross domestic product (GDP) to a gross national product (GNP) mindset.

What can our capital, enterprises and people produce for Singapore across the world? The recent restructuring of Temasek Holdings provides a timely opportunity to manage this capital more effectively and strategically.

I propose three pathways.

Pathway one – strategy investing in global norms. Let us invest in sectors where Singapore lacks the natural advantages. Emerging domains like space technology are prime examples. By positioning ourselves as a critical node in these high-value ecosystems through targeted R&D and global partnerships, we secure our position and our relevance in the future economy.

Pathway two – hunting as a pack. We must leverage the new Temasek-Singapore restructuring as a portfolio to create a Singapore pack. Our national champions should act as anchors, pulling our smaller enterprises into global supply chains and opening doors that our small and medium enterprises (SMEs) cannot knock on alone.

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Pathway three – placing Singaporeans overseas. As we invest globally, can we build structured overseas pathways for Singaporeans? Not student exchanges, not internships, but good jobs from early career to mid-career, leveraging the host country networks that our sovereign investments can help create. Placing Singaporeans overseas seeds the nodes of our global network, returning with relationships and experiences to drive our network economy.

In closing, Mr Chairman, as a small city-state, we must capture value across global networks. By managing our capital exports strategically, we strengthen our future economy, we grow our enterprise ecosystem and generate good jobs for Singaporeans at home and abroad.

The Chairman: Mr Kenneth Tiong, you may take your two cuts together.

Property Tax – Annual Value versus Capital Value

Mr Kenneth Tiong Boon Kiat (Aljunied): Sir, on property tax valuation for owner-occupied homes.

A constituent I visited is a retiree in his home for decades – asset rich, cash poor. His landed home is one of the most basic in the area. His neighbour tells a different story – rebuilt into a multi-storey house; three units, three entrances, three tenants and a very high rental yield.

Under the annual value (AV) system, his property tax is set by comparable rentals, including his neighbour's. His neighbourhood gentrified around him while he stayed put. A retiree who never rented and never will is taxed as a landlord.

In February 2024, the same concern was raised – how IRAS assesses AV for asset-rich but cash-poor owners. The response was that the Inland Revenue Authority of Singapore (IRAS) considers "improvement works last done." But his problem is not his property's condition. It is his neighbour's rental income. The AV system yokes an owner-occupier's tax to his neighbours' self-interested actions.

Sir, there is a better method. Capital value – based on sales, not rentals. It would better reflect the position of owner-occupiers who derive no rental income. The Government rejected this, citing fewer sales transactions and greater price volatility. Why does this reasoning not apply to the Chief Valuer's other function?

When the Chief Valuer prices state land for BTO flats, the methodology references resale flat transactions – this was confirmed by the Government in November 2025. Can the Minister explain this inconsistency? Will the Government consider capital value for owner-occupied property tax?

GST Price Display – Hotels and Restaurants

Last year, my colleague, Louis Chua, asked whether the administrative concession allowing hotels and restaurants to display prices excluding GST and service charge was still relevant. The Minister replied that he did not think consumers would be confused. But in 2022, IRAS had to clamp down on restaurants that were imposing nominal service charges – as low as 0.1% – specifically to exploit this loophole and avoid displaying GST inclusive prices. These establishments were gaming the system to advertise lower prices while adding the charges at the end. If consumers were truly not confused by this practice, why did IRAS need to take enforcement action?

The real problem is that this exemption creates a perverse incentive. Restaurants that impose a service charge can advertise prices almost 17% lower than what customers actually pay. It is a competitive advantage that comes at the expense of price transparency.

IRAS justifies this concession by saying it helps restaurants manage pricing differences between dine-in and takeaway orders. But this rationale does not hold up. It is just as easy to display a full price and subtract a 10% discount for takeaway as it is to display a lower price and add a 10% service charge for dine-in. The arithmetic is identical, only the direction changes. And this takeaway rationale cannot explain why hotels also enjoy the same exemption. There is no such thing as a takeaway hotel room.

In an age of electronic menus and ordering systems, it is anachronistic to cite the cost of printing paper menus as justification for denying consumers basic price transparency.

I urge IRAS to conduct a proper public feedback exercise. First, assess consumer demand for clear display of GST-inclusive prices. Second, estimate the actual cost to hotels and restaurants of modifying their menus and ordering systems. Let the evidence, not assumptions made three decades ago, determine whether this concession still serves any public interest or whether it simply allows businesses to advertise artificially low prices at the expense of consumer clarity.

Support SMEs

Mr Lee Hong Chuang (Jurong East-Bukit Batok): Mr Chairman, in Mandarin.

(In Mandarin): Over the past few months, SME owners have told me that it is not that there are no orders, but the customers are placing orders more cautiously with shorter cycles. They also say that what worries them most is not the hard work, but the uncertainty. Therefore, prudent fiscal policy is not just a macroeconomic principle but also foundation for providing stable expectations for businesses.

Over the years, the Government has accumulated national Reserves and made good use of the Net Investment Return Contribution (NIRC) to support national development and helping families and businesses to weather difficult times. This fiscal resilience is itself the greatest support for SMEs.

This year we have achieved a fiscal surplus. I believe the key is not just the numbers, but how we utilise this space to strengthen the business confidence to support SME upgrading and transformation whilst reserving buffers for potential future risks.

Therefore, I would like to ask the Minister to clarify two points. First, when utilising the fiscal supplies, how will the Government balance replenishing Reserves and maintaining discipline while also increasing support for SMEs for transformation, digitalisation and internationalisation, so that businesses become more competitive in an uncertain environment? Second, within the framework of emphasising intergenerational equity, how do we ensure that today's fiscal decisions not only avoid burdening the next generation but also preserve sufficient policy flexibility and response capacity for future businesses?

Mr Chairman, prudent fiscal policy is not just about safeguarding the books but about safeguarding business confidence and also employment stability as well as Singapore's long term economic resilience.

The Chairman: Ms Tin Pei Ling, you may take your two cuts together.

Reduce Compliance Burden for Businesses

Ms Tin Pei Ling (Marine Parade-Braddell Heights): Thank you, Chairman. Regulations set clear boundaries for businesses. They protect consumers, deter unfair and illicit practices and support healthy industry development. But compliance carries costs.

In Singapore, our strong regulatory framework upholds integrity, safety and fair markets, yet compliance also imposes direct expenses, administrative burdens and slower decision cycles. For instance, complex or changing regulations often force companies to recruit additional compliance specialists, roles that can be hard to fill, raising recruitment and headcount costs while still leaving compliance challenges unresolved.

These reduce operational flexibility and lengthen wait times. Smaller firms and fast‑moving businesses are hit the hardest.

At a time when companies are already squeezed by rising costs and fierce competition, streamlining regulatory requirements would materially ease these burdens. I therefore ask whether the Government will undertake a review of rules across industries and verticals to identify opportunities to increase operational flexibility and shorten processing times for regulatory outcomes.

Reduce Cross Border Trade Friction

Businesses face real hurdles in cross‑border trade – divergent rules and standards across countries, cumbersome paperwork, limited access to trade finance, fragmented and inefficient payment systems and incompatible data standards and systems. These frictions are amplified by a volatile geopolitical environment – unilateral measures, such as the sudden US tariff changes are a stark example.

Time is money. Firms need swift movement of goods and settlement of payments. They cannot afford to be hit by unexpected sudden policy changes or tariff shocks while their cargo or cash is in transit.

Singapore SMEs are particularly vulnerable. With a limited domestic market, they must internationalise. Cross‑border frictions, however, add to their cost pressures and constrain their ability to scale.

The ASEAN Single Window was thus welcomed. It enables secure electronic exchange of trade documents, speeds up cross‑border clearance and supports deeper economic integration. Hence, could the Government set out what more will be done to expand cross‑border trade and reduce friction through the ASEAN Single Window?

The Chairman: Mr Ng Shi Xuan, you may take your two cuts together.

Personal Income Tax Credits

Mr Ng Shi Xuan (Sembawang): Chairman, much has been said about our recent Budget surplus and how we can share this gain with Singaporeans. But the MOF Occasional Paper released earlier shows that about 35% of Singaporeans and PRs do not pay personal income tax, and our personal income tax system is already largely progressive. In Budget 2016, the relief cap was reduced from $100,000 to $80,000 from Year of Assessment (YA) 2018 to ensure that higher-income individuals pay more tax.

Today, the Personal Income Tax is the third largest source of Government revenue. So, fairness in structure matters.

Through our PAP Policy Forum engagement as Mr Saktiandi, and from what I see in Naval Base constituency, many dual-income middle-class families feel stretched. They pay tax, may not qualify for direct transfers, yet support children, ageing parents and fulfil national duty. They ask me, can we do something about it?

So, I would like to suggest tax credits for two groups of Singaporeans – NSman and caregivers. Under our current release and using a median dual-income household earning about $12,000 per month as an example, one spouse earning $72,000 may claim about $24,000 to S$31,000 in parent, child and NSman reliefs, depending on how many dependents one may have. Tax falls from about $2,800 to about $550. But deductions depend on marginal tax rates. A $1,000 deduction saves $115 at 11.5%, but only $70 at 7%. For a single-income household earning about $12,000 a month, after claiming the reliefs, tax payable would still be around $6,000 to $7,000.

I suggest a modest $2,500 tax credit, comprising $1,500 for NSman and $1,000 for caregiver instead of tax relief. And these would provide meaningful and equal recognition regardless of our tax bracket.

With SAF60 approaching in 2027, this could be an appropriate juncture to recognise our NSmen and with the Budget surplus, is a timely window to pilot such calibrated credits.

Leveraging AI for GeBIZ

Moving to businesses. With the recent Budget surplus, we have an opportunity to make careful reinvestments that raise productivity across our economy. Some businesses have shared that they are adjusting to cost pressures from increases in Local Qualifying Salary and foreign worker levies. These are important structural moves to uplift wages and productivity. But we must also help businesses bring in more revenue and compete more effectively.

One practical way to do so is through how to leverage AI in Government procurement. But this is not to say that all the work must be done by the Government. We will be giving AI subscription support for individuals in this Budget. In this same spirit, could we also pilot —

The Chairman: You are out of time. Mr Shawn Loh.

Tech-enabled Procurement for the Future

Mr Shawn Loh (Jalan Besar): Mr Chairman, I will try to do better with time. I declare my interest as Group Managing Director of Commonwealth Capital Group. While the vast majority of our conglomerate’s revenues are with retail customers and private businesses, there may be occasions where some of our investee companies serve the Government as a customer.

In my engagements with the private sector, including with the Singapore Business Federation, it is clear that our Government is a key player in our corporate ecosystem. It spends close to $30 billion a year on procurement, contracting with close to 8,000 vendors. It also disburses significant sums in the form of grants, much of it goes to SMEs.

Given its heft, the Government can shape the rules of the game to support our local enterprises: one, by taking a leadership role in adopting new technologies to improve efficiency; two, by shaping market norms and business practices, and three, by reducing unnecessary frictions when interacting with the Government.

To this end, the Ministry could consider the following.

First, rethink how the Government interacts with businesses. Let us not ask companies to navigate the Government but instead ask how the Government can proactively use technologies to guide companies in the right direction. At the front-end, GoBusiness and the Business Grants Portal are good first steps. But they still require companies to sift through a smorgasbord of policies and pick out the relevant ones. Instead of relying only on SME Centres, can we go further with AI?

For example, imagine a “GovAI Enterprise Assistant”. Based on their parameters, such as scale, industry and markets, companies could receive bespoke recommendations on applying for upcoming tenders or relevant grants; get customised real-time updates on how policy changes impact their business; and ask questions about how investment or hiring decisions would impact their payouts from the Government under all relevant policies.

Second, on the back-end, it currently takes between four to 10 weeks to process grant applications. Could our public servants use AI tools to expedite these assessments?

Third, adopt more pro-business payment terms and disbursement schedules, which should be at negligible cost to the Government. Some grants, like the Progressive Wage Credit Scheme, can be paid earlier and more frequently, instead of only once a year. This would have an immaterial impact on the Government’s cashflow but could make a difference to our cash-strapped local companies.

Mr Chairman, the Government operates at a scale which no local enterprise can match. It is best placed to invest in the right technology and processes to support our local enterprises to succeed.

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Inclusive Procurement and AI-enabled MOF

Ms Denise Phua Lay Peng (Jalan Besar): Chairman, let me speak on two areas where MOF can lead meaningful transformation: inclusive procurement and AI-enabled fiscal governance.

On inclusive procurement, beyond its current emphases on transparency and quality, MOF can better support SMEs with three refinements.

First, faster payments through quicker payment cycles for smaller contracts and milestone-based payments for larger ones, including more regular payments for Progressive Wage Credits. This addresses cash-flow pressures preventing capable SMEs from bidding.

Second, smarter contract packaging by avoiding monolithic tenders where feasible. Disaggregating components like cybersecurity or design allows SMEs to compete in their strengths whilst maintaining programme coordination.

Third, recognising social value in contracts through a points system similar to weightage in sustainability contracts. Modest weight could reward verifiable contributions like skills transfer, disability employment or SME participation. Hence, differentiating proposals that strengthen our societal ecosystem.

On AI-enabled fiscal governance, MOF can harness AI to meet rising transaction volumes and accountability expectations.

First, better forecasting using machine learning to analyse economic indicators, demographics and trade trends for more accurate budget forecasts.

Second, improved compliance through AI-powered smart forms and real-time compliance checkers, strengthening governance whilst reducing administrative workloads.

Third, sharper resource allocation by analysing which programmes deliver greatest public value per dollar.

By refining procurement and harnessing AI, we can strengthen enterprises, embed social value recognition and ensure fiscal system robustness.

The Chairman: Ms Yeo Wan Ling, you may take your two cuts together.

Improve Experience Transacting with Government

Ms Yeo Wan Ling (Punggol): Chairman, if we want businesses, especially SMEs, to work well with Government, their experience on GeBIZ must be efficient, transparent and fair. I propose that we refresh GeBIZ to streamline documentation, reduce repetitive submissions and make procurement more user-friendly. Lower friction encourages broader participation and stronger competition.

Second, can the Ministry trial AI tools to strengthen procurement finance, audit and administration? AI can flag anomalies, speed up verification and reduce manual processing, while maintaining strong governance. The system should also automatically check that bids comply with the Progressive Wage Model and Local Qualifying Salary requirements before awards are made, ensuring responsible contracting.

Finally, procurement should move more decisively towards outcome-based key performance indicators (KPIs), accessing impact, not just lower costs. By modernising GeBIZ, we can make Government procurement faster, smarter and more aligned with our economic and social priorities.

Procurement Opportunities for Businesses

Government procurement must not only deliver value for money, it must also create fair opportunities for our SMEs. I would like to ask for an update on the expansion of the TenderLite to infocomm technology (ICT) contracts. Many smaller tech firms have strong capabilities in digital solutions, cybersecurity and AI, but struggle to compete in large, bundled ICT tenders due to scale and track record requirements.

As agencies accelerate digitalisation, expanding TenderLite into ICT can lower entry barriers, allow smaller firms to build credentials progressively and strengthen our local tech ecosystem. At the same time, clearer project scoping and sensible risk allocation will help SMEs participate with confidence, without overextending themselves.

By widening access to ICT procurement opportunities, we support enterprise growth, deepen competition and build greater resilience into our public sector's digital transformations.

Reserves, Disbursement and Procurement

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Mr Chairman, I rise to speak on two areas under MOF's purview. First, several Statutory Boards, including JTC, Civil Aviation Authority of Singapore and our polytechnics host substantial financial resources to support their long-term missions. While each operate within its own governance structure, differences in scale and investment capabilities may lead to uneven outcomes over time. Is there scope for a stronger shared support, for example, pool investment platforms or enhanced central advisory capabilities could help smaller boards achieve better risk-adjusted returns, while preserving their autonomy and mandates?

Second, I wish to address grant disbursement timelines that directly impacts businesses' cash flow. The Progressive Wage Credit Scheme is an important measure supporting lower wage workers. However, annual disbursements may create interim cash flow pressures for SMEs. Businesses have shared that more frequent payouts, such as quarterly disbursements aligned with Goods and Services Tax (GST) cycles, would ease cash flow without increasing overall fiscal requirements. I hope the Ministry can consider this.

Mr Chairman, I declare that I serve as advisor to both the Visual, Audio, Creative Content Professional Association, and the National Instructors and Coaches Association. In that capacity, I wish to convey feedback on Government procurement practices. In the creative and media sectors, payment upon project completion remains common. While administratively straightforward, this places significant cash flow strains on smaller firms and freelancers.

In Government projects, the impact is amplified. Subcontractors and freelance professionals often bear financial risk despite delivering interim milestones. I would like to urge the Ministry to consider moving towards milestone or progressive payments, as a default for larger Government projects. These will help ease cash flow pressures and support industry sustainability.

A related issue concerns compensation for material scope changes, where revision substantially expand deliverables, recognising these as legitimate grounds for additional payment would set clearer standards and reduce disputes.

Mr Chairman, fiscal prudence is also about timing and structure. Strengthening reserve stewardship, improve disbursement timing and promoting fair procurement can enhance both stability and fairness on the ground.

Mr Speaker: Minister Indranee Rajah.

The Second Minister for Finance (Ms Indranee Rajah): Mr Chairman, I thank the Members for their cuts.

Mr Chairman, sound public finance is not just about balanced budgets, fiscal rules and safeguards. For us, it is something more, and that is captured in MOF's motto which is: to create a better Singapore through finance.

Nothing can get done without finance. The flip side of this is that public finance has to be handled with great care and responsibility, because how it is used determines how the country moves forward and how the lives of Singaporeans can be improved.

Hence, let me touch on the principles that underpin our approach to public finance.

First, fiscal prudence and sustainability. We must spend wisely and within our means. This is not only to meet current needs, but also to maximise our fiscal space to seize new opportunities for growth and have the ability to deal with future challenges or crises.

Second, value for money. Every public dollar represents the hard work of our people, that has been entrusted to the Government to use for the national good. We will continue to achieve more and deliver better outcomes for Singaporeans and Singapore.

Third, finance as a catalyst. Public funding should do more than fill gaps. It should drive new directions, accelerate growth and unlock momentum. Our goal is for finance to enable impact and catalyse innovation and transformation.

We are in a position of fiscal strength today, because of decades of careful stewardship and forward fiscal planning.

I agree with Mr Lee Hong Chuang that our fiscal decisions today should preserve sufficient buffers and policy flexibility for future generations.

We regularly review our tax system to strengthen our revenue base to meet rising needs, while ensuring that the system remains progressive. Our tax system is supplemented by the Net Investment Returns Contribution (NIRC) framework that allows part of our investment returns to be taken into the annual budget in a sustainable way. Taken together, our fiscal system strikes a balance between supporting short-term needs, and growing our reserves in line with the economy to provide a steady stream of income over the long term, as well as acting as a buffer against future shocks.

As the Prime Minister has mentioned in the Budget debate, our revenue upsides have been used to address both our current and future needs. In addition to permanent schemes, we have provided significant one-off support to Singaporeans in the past few years to deal with cost-of-living pressures and also funded investments across many areas, ranging from social needs to our economy. As announced in Budget 2026, these include additional support for companies, especially our SMEs, to internationalise and build AI capabilities.

Ultimately, our revenue and expenditure considerations are anchored on fiscal responsibility. MOF remains committed in ensuring that our current and future needs can be met in a fiscally sound and sustainable manner.

I thank Mr Edward Chia for his suggestions on stronger shared support to help our Statutory Boards achieve better returns for their reserves.

Statutory Boards may hold some reserves to support their capital investment and working capital needs. MOF reviews the financial positions of Statutory Boards to prevent excessive build-up of reserves.

Where Statutory Boards have reserves, they invest their reserves in accordance with their liquidity needs and risk appetites.

The Accountant-General's Department (AGD) has developed schemes to allow Statutory Boards to enjoy economies of scale and easier access to appointed fund managers and investment consultants through AGD's Demand Aggregation Programme. We will continue to review ways to enhance our central support.

Mr Saktiandi Supaat asked how MOF strengthens programme evaluation and scrutiny over high-value projects. These processes continue to be key in delivering better, value-for-money outcomes.

First, we work with agencies on programme evaluation and review. Agencies are required to map how interventions and underlying assumptions translate to the desired outcomes. Agencies are also required to develop evaluation plans with indicators that track implementation, outcomes and costs. Besides enabling systematic tracking through these metrics, the evaluation plans specify clear milestone-based reporting. These help us to understand whether a programme is achieving its objectives, whether improvements are needed and facilitates resourcing decisions.

Mr Saktiandi Supaat also asked if there have been reviews that allow us to re-allocate resources dynamically. As our operating environment changes, MOF works with agencies to redesign programmes and pivot resources to new priorities when appropriate.

The Enterprise Workforce Transformation Package is one example. Technological advancements are increasingly transforming business models and jobs. We saw a need to encourage companies to undertake enterprise and workforce transformation in tandem. However, the support for workforce transformation programmes could be better coordinated and the utilisation of initiatives, such as the SkillsFuture Enterprise Credit (SFEC) improved.

We worked closely with the Ministry of Manpower (MOM), the Ministry of Education, and the Ministry of Trade and Industry to review our existing programmes and announced the key changes in Budget 2025. This included the SkillsFuture Workforce Development Grant (WDG) that consolidates workforce transformation schemes under a single application channel to provide more holistic support to companies. Under the WDG, we will also provide more support for job redesign. We also worked with MOM to redesign the SFEC to make it easier for companies to use the credits and strengthen incentives for companies to upskill their employees.

For high-value projects, MOF applies an additional layer of scrutiny across the whole of Government, to evaluate their worthiness and cost-effectiveness. Specialised committees support the review of big-ticket information and communications technology and smart system (ICT&SS) and cybersecurity projects. Under the Gateway Process, larger-scale and more complex infrastructure projects are reviewed by MOF and the Development Projects Advisory Panel (DPAP). These committees include independent third parties, such as industry practitioners and experts, with deep technical expertise. In 2025, Government agencies, working together with MOF and DPAP, were able to achieve a total cost avoidance of at least $1.4 billion in development costs. The Gateway Process remains an integral part of how we ensure value-for-money. As part of our efforts to continuously improve, MOF has recently streamlined the Gateway Process to speed up project approvals while retaining the rigour that has helped us achieve value for money.

Mr Saktiandi Supaat also aptly spoke about the role of finance as a catalyst. Mr Chairman, MOF uses public finance to catalyse growth and innovation. In every Budget, we deploy our fiscal resources strategically to drive effective change – we have invested heavily to build Singaporeans' long-term capabilities, through lifelong learning and the adoption of AI, as well as strengthened our enterprise ecosystem.

MOF will continue to develop new solutions, working in partnership with the community and businesses, to address current and future challenges.

An example is how Tote Board supports community-driven innovations in social services, health and community care.

Last year, we announced the third tranche of the Tote Board's Enabling Lives Initiative Grant to support innovation for the disability sector.

Working with SG Enable, the first grant call has seen a diverse slate of proposals receiving support, ranging from community and independent living initiatives, to training and employment programmes for persons with disabilities.

Mr Kenneth Tiong raised a cut on property tax valuation. As I understand it, he is suggesting that the valuation of an owner-occupied residential property for property tax purposes should be derived differently from non-owner-occupied property. His proposal is that while valuation of properties that are rented out should be using annual value (AV), which is based on rental transactions, owner-occupied properties should instead be based on "capital value" derived from sale transactions.

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That would not be an appropriate approach. One should adopt the same valuation basis for all residential properties, regardless of whether it is owner-occupied, rented out or vacant. That is so that there is a common yardstick to assess properties for property tax purposes.

So, having regard to the need for a common yardstick, the real question is whether one should use rental data for all residential properties or sales data for all residential properties. It is not a question of using AV for rental properties and capital value for owner-occupied properties. So, on this, the use of rental data to determine AV keeps property taxes, which are assessed annually, more stable and predictable for homeowners.

This is because there are more rental transactions than sale transactions, which provides a more accurate and stable picture of comparable properties to determine the valuation of a given property.

Rents are also generally less volatile and subject to less variability compared to sale prices, as the rents are locked in by the lease agreements over a period of time, and hence, they are less impacted by market sentiments and the property cycle.

So, just because a neighbour may have a better or a more nicely developed home that commands a higher rental or AV does not mean that the neighbour who has a simpler home will have the same AV because, obviously, when valuing, adjustments will have to be made to take into account the necessary attributes.

Next, it is also important to distinguish between the valuation and the property tax rate in the determination of property tax payable.

While the valuation for all residential properties is determined using a common yardstick, we can and do apply different property tax rates for owner occupied and non-owner-occupied properties. As a concession to owner-occupied properties, property tax rates for owner-occupied properties are lower compared to non-owner-occupied properties. From time to time, we also provide one-off property tax rebates for owner-occupied properties to help cushion the impact of the property tax.

This means that the retiree is also not taxed as if he is a landlord while the neighbourhood gentrifies. In any case, shifting to capital value as the basis for property tax assessment does not necessarily lower the assessment. The fact of the matter is that when a neighbourhood is revitalised, the attractiveness of the retiree's property would increase, and one can expect both rent and sale prices to increase, that is, both the AV and the capital value will go up.

Mr Kenneth Tiong also cited the use of sales data for sale of state land. Sales data is appropriate for use where there is a sale of land or property, as sales data would be more directly relevant. This includes the sale of state land to HDB for public housing development. For AV, rental data is more appropriate for the reasons explained earlier.

Mr Chairman, we are stewards of our reserves, assets and resources. As Singaporeans, it is our collective responsibility to make the best use of our resources for ourselves and for future generations, just as the previous generations did for us. Let us create a better Singapore through finance together.

The Chairman: Senior Minister of State Jeffrey Siow.

The Senior Minister of State for Finance (Mr Jeffrey Siow): Mr Chairman, let me start by addressing Ms Tin Pei Ling's question on the Government's efforts to support businesses by streamlining regulatory requirements.

The Economic Strategy Review (ESR) committees have engaged many business leaders to gather feedback on Singapore's long term economic strategy. Many business leaders, here and abroad, have emphasised the importance of Singapore's reputation as a well-governed, stable place for doing business. Our clear and consistent rules and laws are a competitive edge for us, especially in today's uncertain global economic environment.

Besides the ESR, I am also part of the Inter-Ministerial Committee on Pro-Enterprise Rules Review chaired by the Deputy Prime Minister, which oversees efforts to improve regulatory efficiency.

MOF agencies are strongly supporting the Inter-Ministerial Committee’s efforts. For instance, Customs is considering extending the validity period of certain licences from three years to five years, so that businesses need not renew them as frequently. Customs is also shortening the time for businesses to obtain some licences to within 30 working days, so businesses have greater certainty in their planning and operations.

The Accounting and Corporate Regulatory Authority (ACRA) will consult businesses and the audit community later this year on whether to exempt more small enterprises from having to audit their financial statements. This will reduce their cost burden and improve cash flow.

While we do want to keep compliance requirements proportionate, some regulations which balance between business and consumer interests require a little bit more careful consideration.

So, for example, Mr Kenneth Tiong asked if the Inland Revenue Authority of Singapore (IRAS) can review the concession for F&B establishments and hotels to display prices that exclude GST.

The purpose of this concession is to simplify processes for establishments that impose service charges, which includes both F&B establishments as well as hotels and this is because service charges are variable and may be waived or reduced. This concession has been in place for the last 30 years and it has become the accepted norm. Making an industry-wide change will require such businesses to incur additional costs when the industry is currently facing cost pressures. Nonetheless, we will review this in the future, to take into account technological improvements as well as business and consumer preferences.

Mr Edward Chia and Mr Shawn Loh suggested that the Government review the frequency of the Progressive Wage Credit Scheme (PWCS) payouts, citing how annual payouts may result in cashflow constraints for smaller businesses.

The Ministry of Manpower annualises PWCS payouts because the wages of workers in the Progressive Wage Model sectors can vary throughout the year. Smoothening the payout on an annual basis ensures that we provide sufficient, fair and consistent support to companies that are implementing wage increases to uplift our lower-wage workers. So, it is not a technical issue, it is a policy issue.

We, nevertheless, recognise that smaller businesses face cost pressures and cashflow constraints, which is why we have provided the Corporate Income Tax Rebate and Cash Grant to support more companies in this year's Budget.

Ms Tin Pei Ling asked about the ASEAN Single Window and I managed to hear all of her cuts before the mic cut her off. The ASEAN Single Window enables the exchange of documents for cross-border trade across ASEAN member states.

The onboarding of ASEAN Member States to the ASEAN Single Window has reduced paperwork, shortened clearance times and improved predictability and transparency for traders and exporters. This has facilitated trade by reducing cross-border friction.

Singapore chairs the Steering Committee for the implementation of the ASEAN Single Window. We are now exploring ASEAN Single Window 2.0, to strengthen interoperability and to expand electronic trade-related document exchanges to partners, such as China, Japan and South Korea and this could include adopting standardised technologies that allow for more types of electronic documents to be exchanged.

These improvements to cross-border clearance processes will make it even easier for businesses to use Singapore as a launchpad to grow and expand internationally – in line with the recommendations from the ESR.

Mr Saktiandi Supaat and Ms Tin Pei Ling asked about how the Government can help businesses catalyse innovation and enhance processes to be more productive.

We encourage businesses to use more technology to increase productivity. For instance, SMEs that do not have large back-office teams can digitalise their processes to reduce paperwork and errors. A recent study by Deloitte estimated that using digital invoices can save small businesses up to $20 per invoice.

To support this effort, the Infocomm Media Development Authority (IMDA) launched InvoiceNow, Singapore’s e-invoicing network, in 2019. Today, over 63,000 businesses are on InvoiceNow. One such business is I Interior Design. By using InvoiceNow, this business can automatically issue e-invoices and populate accounting records, without having to spend time on manual data entry. Many businesses and trade associations have given us positive feedback that they were able to reduce invoicing errors using InvoiceNow.

For businesses with overseas operations, cross-border B2B transactions will also be easier through InvoiceNow as its underlying e-invoicing standard is internationally accepted.

For these reasons, the Government has been nudging more businesses to use InvoiceNow. We provide newly incorporated businesses with one year of free InvoiceNow services. Since 1 November 2025, newly incorporated companies that voluntarily register for the GST are required to transmit invoice data to IRAS via the InvoiceNow network. Such companies have benefited from faster GST audits and refunds.

As more businesses come onboard the InvoiceNow network, the network benefits and efficiency gains will only increase further and so in consultation with the Singapore Business Federation and other trade associations, we are now ready to take the next step to push for greater adoption of e-invoicing.

We will require all GST-registered businesses to submit digital invoices to IRAS via InvoiceNow by April 2031. This will bring on 90,000 more businesses to the InvoiceNow network.

We will do this progressively. We will prioritise the onboarding of smaller businesses so that we can support them better in their transition. First, we will make a suite of InvoiceNow-Ready software: solutions available to businesses free-of-charge. Second, we will provide new cash grants to defray any operational costs of adopting InvoiceNow-Ready software up to $1,000 for smaller companies and up to $5,000 for larger companies. More details on the timeline and support provided will be released by IRAS and IMDA.

Turning to personal taxes, Mr Saktiandi Supaat asked about reviewing the $20,000 threshold for personal income tax exemptions. While the personal income tax exemption threshold has not been changed for some time, this threshold should be seen together with our overall system of tax rates, tax reliefs and rebates that applies to all individuals.

Under our current system, one in three resident workers do not pay any personal income tax at all. And among those who do, about eight in 10 have an effective tax rate of less than 6%.

So, I would like to reassure Mr Saktiandi that we will regularly review our income tax system to ensure that it is progressive and resilient, and that the tax burden is kept low, particularly and especially for middle- and lower-income.

Mr Ng Shi Xuan suggested providing tax credits to recognise our NSmen and caregivers. As Mr Ng pointed out, we do have various tax reliefs in place to recognise NSmen and caregiving, or caregivers. To complement the tax reliefs, both NSmen and caregivers are also eligible for cash grants and credits. Cash grants and credits are administratively simpler and more progressive than tax credits which are tied to payable taxes.

For example, we provide up to $18,500 in LifeSG credits and top-ups to CPF and Post-Secondary Education accounts via the NS Home Awards for operationally-ready NSmen, and we also have provided one-off NS LifeSG credits in 2022 and 2024. Caregivers can also apply for the Home Caregiving Grant (HCG) to defray the cost of caregiving.

We will continue to review the support provided to NSmen and caregivers, whether through tax deductions, cash grants, or other means to recognise them for their contributions and sacrifices.

Finally, Mr Victor Lye spoke about strategically leveraging Temasek's global investments to create more opportunities for Singaporeans. Temasek's mandate is to deliver good, sustainable long-term returns. Their returns contribute to the annual Budget via the Net Investment Returns framework.

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As a principle, we want Temasek to operate on a commercial basis and optimise their returns. As Mr Lye acknowledges, the Government does not prescribe specific areas of investment or dictate Temasek's individual investment decisions. Nonetheless, Temasek is indeed a valuable partner for the Government in our economic growth strategies. And we work together whenever there is alignment on the three pathways that Mr Lye highlighted: identifying strategic areas for investment, growing our local champions and developing Singaporean talent.

Mr Chairman, in an increasingly competitive global landscape, being pro-enterprise is essential to Singapore's continued economic relevance. MOF is systematically improving our regulatory environment to reduce compliance costs and respond to business needs. We will continue to closely partner businesses, industry associations and unions to maintain Singapore's position as one of the best places in the world to do business.

The Chairman: Senior Parliamentary Secretary Shawn Huang.

The Senior Parliamentary Secretary to the Minister for Finance (Mr Shawn Huang Wei Zhong): Mr Chairman, I will speak on how MOF is making Government procurement more accessible for businesses and how technology can enhance public service delivery and accountability.

When procuring goods and services, the Government selects solutions that provide value for money so that we can achieve more and deliver better outcomes with public funds.

When considering value for money, we take a holistic assessment of both benefits and costs, which can encompass economic, social and environmental outcomes.

I appreciate Ms Denise Phua's and Ms Yeo Wan Ling's suggestions to embed social value and look into outcomes beyond cost in our procurement. Our holistic approach towards value for money allows us to do so. To illustrate, in a tender for contact centre services by the Public Service Division, the awarded contractor was required to hire persons with disabilities and seniors for at least 10% of the jobs created by the contract. We will continue to look for opportunities to reap positive economic, social and environmental outcomes, while achieving value for money and avoiding excessive compliance costs for businesses.

Mr Shawn Loh and Ms Denise Phua spoke about making Government procurement more accessible for SMEs. Ms Yeo Wan Ling asked for an update on extension of Tender Lite to ICT procurement.

To improve accessibility, Government agencies ensure our procurement opportunities are appropriately sized to allow SMEs to participate while ensuring it is sufficient for suppliers to invest in innovative solutions or technology that improve productivity.

Last year, we announced two initiatives to make procurement opportunities more accessible: expanding Tender Lite to construction and ICT procurement; and introducing the new Innovative Procurement Partnership. Let me share updates on each in turn.

Tender Lite was first introduced in April 2024 to simplify the contract conditions of tenders up to $1 million, making them more accessible to SMEs. We implemented Tender Lite first for the procurement of general goods and services and then expanded to construction procurement in May 2025.

MOF has been working closely with industry stakeholders to expand Tender Lite to ICT procurement. We have incorporated feedback from the Singapore Business Federation (SBF), the Association for Small and Medium Enterprises (ASME) and SGTech.

First, we will streamline the number of contract conditions so that businesses find it simpler to participate.

Second, we will share risks with businesses. We will remove clauses on liquidated damages where possible or cap the liquidated damages for late delivery and service performance at 10% of the relevant contract value. MOF will also remove the need for security deposits. These changes will ease businesses' cashflow and reduce the risks that they bear.

MOF will be launching Tender Lite for ICT procurement from April 2026. With the expansion of Tender Lite to ICT contracts, Tender Lite will cover all procurement with tender value up to $1 million. With Quotation and Tender Lite, around 90% of Government procurement opportunities will benefit from simpler contract conditions, making procurement more accessible to businesses, especially SMEs.

MOF recognises the need to foster innovation and has been supporting the procurement of innovative solutions. Last year, we have taken this further and introduced the Innovative Procurement Partnership.

This initiative enables public agencies to collaborate with businesses to test innovative solutions and provides assurance to businesses of the opportunity to scale up if the pilot testing is successful.

To make the Innovative Procurement Partnership more accessible to SMEs and startups, established track records are not a requirement. The Government will also share risks with businesses by removing the need for security deposits and liquidated damages by default during the pilot testing phase.

In addition, the Innovative Procurement Partnership is conducted via open sourcing. In other words, any business can participate.

I thank Mr Edward Chia and Ms Denise Phua for their suggestions to ease cashflow for smaller firms and freelancers.

MOF provides Government agencies with contract templates and guidelines on payment milestones, including increasing the number of payment milestones where appropriate to ease cashflow. These templates and guidelines are developed with inputs from businesses and Government agencies to reflect industry norms.

For example, when procuring design services, Government agencies are required to specify the expected iterations of changes to allow the supplier to better price their bids.

Ms Denise Phua and Mr Shawn Loh asked how MOF agencies are harnessing technology, such as artificial intelligence (AI), to strengthen governance and improve the experience for businesses and citizens when transacting with Government. Ms Yeo Wan Ling also suggested refreshing GeBIZ, our centralised e-procurement portal for Government agencies and Mr Ng Shi Xuan suggested incorporating AI into our procurement processes.

We are committed to continuously making improvements and one such opportunity is with GeBIZ.

GeBIZ was introduced in 2000 to digitalise procurement processes and consolidate Government quotations and tenders. Businesses can access Government procurement opportunities and submit their proposals.

Over the years, we have continuously enhanced GeBIZ. For instance, we implemented GeBIZ Supplier File Repository in 2024 to enable suppliers to use a single set of documents across multiple bids, reducing duplicative work.

Moving forward, we will tap on the latest technology to comprehensively refresh GeBIZ system. The refreshed GeBIZ will go beyond the sourcing stage, covering pre-sourcing and contract management stages. This will consolidate systems that are currently operating separately and make procurement even more transparent, effective and efficient. This will be a multi-year effort.

MOF will work with SBF and ASME on the modes of engagement with businesses to ensure the refreshed GeBIZ system meets the needs of our Government procurement and business community. We invite businesses, who are interested, to sign up for the engagement when we send out the invitations.

A development that we will harness is the increasing capability of AI systems, which are becoming more widely used across businesses. AI can significantly improve productivity if well implemented. MOF is committed to integrate AI tools into the refreshed GeBIZ system where possible.

Beyond procurement, we are also leveraging AI in other areas of finance and governance. For finance and audit, we trialled the use of AI, on top of data analytics, to obtain insights from large volumes of data. Through these tools, ACRA, AGD and Customs officers will be better able to identify trends and detect anomalies, such as non-compliance or fraud, that may not have been detected as quickly via more traditional methods.

We will continue to harness technology and leverage appropriate AI tools to enhance public service delivery and accountability. Mr Chairman, in Mandarin please.

(In Mandarin): MOF will ensure that the Government procurement processes remain fair and transparent. We will continue to introduce measures to assist enterprises participate more easily in Government tender activities. In addition, we will make good use of technology to make business transactions with the Government more efficient and simpler.

We will continue to work with trade associations, chambers of commerce and industry players to collect feedback and continuously optimise the transaction process between enterprises and the Government, helping the businesses save money, effort and time.

(In English): Mr Chairman, MOF remains committed to create a better Singapore through finance. We will continue to ensure fiscal prudence and sustainability. Advance a pro-enterprise environment where regulatory requirements are streamlined to reduce compliance costs. Improve access to Government procurement; and leverage technology to improve efficiency and strengthen governance. These efforts will enable us to serve Singaporeans and businesses better.

The Chairman: We have time for clarifications. Mr Kenneth Tiong.

Mr Kenneth Tiong Boon Kiat: Thanks. One clarification for Senior Minister of State Siow. The Senior Minister of State said that the GST concession is because the service charges are "variable and may be waived or reduced", which it may very well be, but then there is nothing stopping a coffee shop from charging 0.1% service charge to charge GST exclusive prices, which it did in 2022.

So, that is not consistent with what IRAS subsequently did, which was to enforce it and clarify the rules because it updated its guidelines to state that the pricing exception does not apply to businesses that levy a nominal service charge without a genuine business reason, other than to avoid displaying GST inclusive prices. So, what determines nominality, if that is the standard for qualifying for concession? F&B businesses and hotels need certainty too.

And that IRAS has to police this at all suggests that the concession creates more complexity than it resolves, which brings us back to the question of whether it truly serves consumer interest.

Mr Jeffrey Siow: I thank Mr Tiong for his clarification. I think he is referring to a specific case in 2022 against a specific F&B establishment. Indeed, IRAS takes a firm stance against businesses, who levy nominal service charges without genuine reason, other than to avoid displaying GST inclusive prices.

However, it does not mean that the existing concession is no longer relevant to businesses. As I explained in my speech, we will indeed review this and do a discussion and exploration with businesses as well as consumers, on whether or not they would prefer for us to move in a different direction.

The Chairman: Mr Ng Shi Xuan.

Mr Ng Shi Xuan: I would like to clarify. I had a point in my second cut, which was not delivered on whether MOF would consider extending AI subscription tools for businesses in the same spirit as for individuals? Because AI business tools are naturally different from that for individuals.

The Chairman: Who would like to respond to Mr Ng? Senior Parliamentary Secretary Huang.

Mr Shawn Huang Wei Zhong: Thank you to Mr Ng for the clarification. That is something that we will definitely look into.

Firstly, we are working with GovTech to study what are some of the AI tools that can be used within the Statutory Boards, agencies and Ministries. If found useful, we will definitely then open it for use and allow other businesses to use it as well. [Please refer to ​"Clarification by Senior Parliamentary Secretary to the Minister for Finance", Official Report, 26 February 2026, Vol 96, Issue 20, Correction By Written Statement section.] This will definitely save on the development cost and also the use cost as well, and we will most certainly take that suggestion as well.

The Chairman: If there are no further clarifications, I would like to invite Mr Sakiandi Supaat to withdraw your amendment.

Mr Saktiandi Supaat (Bishan-Toa Payoh): Thank you Mr Chairman. I would like to be prudent and efficient.

First of all I am convinced that there is discipline just now in the replies that how we spent, rigour in how we evaluate and adaptable in how we design our systems so I will take this opportunity to thank Minister Indranee, Senior Minister of State, Acting Minister Jeffery Siow and Senior Parliamentary Secretary Shawn Huang for answering all our questions, 14 cuts and 10 speakers.

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And on that note, I also would like to thank the Permanent Secretary, MOF and all the MOF staff behind the scenes who have been helping out to make this possible as well. On that note Chairman, I seek to leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $1,252,309,600 for Head M ordered to stand part of the Main Estimates.

The sum of $68,615,100 for Head M ordered to stand part of the Development Estimates.