Energy Efficiency Grant Increase for SMEs and Non-SMEs Amid Rising Business Costs due to Strait of Hormuz's Prolonged Blockade
Ministry of Trade and IndustrySpeakers
Summary
This question concerns Ms Joan Pereira’s inquiry on whether the Government would increase Energy Efficiency Grant (EEG) support to 90% for SMEs and 50% for non-SMEs due to the Strait of Hormuz blockade. Deputy Prime Minister and Minister Gan Kim Yong stated that the EEG Base Tier was recently expanded to all sectors and extended to 31 March 2028. He noted that current support levels will remain at 70% for SMEs and 30% for non-SMEs while the Government monitors the impact of the expanded scheme. Furthermore, the Deputy Prime Minister and Minister highlighted that the Corporate Income Tax rebate for Year of Assessment 2026 was enhanced from 40% to 50% to mitigate rising business costs. This enhancement includes an increased minimum benefit of $2,000 and a raised total benefit cap of $40,000 per company, with additional support measures to be rolled out if necessary.
Transcript
12 Ms Joan Pereira asked the Deputy Prime Minister and Minister for Trade and Industry whether the Government will consider further increasing the Energy Efficiency Grant to support (i) up to 90% for SMEs and (ii) up to 50% for non-SMEs, for the next 12 months, in view of rising business costs due to the prolonged blockade of the Strait of Hormuz.
Mr Gan Kim Yong: As a result of the Middle East conflict, businesses are expected to face higher energy costs for some time. To encourage our businesses to adopt energy efficient equipment, the Government recently announced the expansion of the Energy Efficiency Grant (EEG) Base Tier to all sectors and extended this support for another year, to 31 March 2028. This will enable more businesses to benefit from the EEG and adopt eligible energy-efficient solutions to be more energy resilient and sustainable.
Small and Medium Enterprises (SMEs) already receive a higher support level of 70%, with non-SMEs receiving 30% under the current EEG. We will implement the expanded scheme at these grant support levels and monitor the adoption and impact of the EEG Base Tier expansion.
Beyond energy efficiency support, the Government has also taken steps to help businesses manage their overall costs. In the immediate term, we have enhanced the Corporate Income Tax rebate announced at Budget 2026 from 40% to 50% for the Year of Assessment 2026. The minimum benefit that an active company with at least one local employee will receive was also raised from $1,500 to $2,000. The total benefit cap for each company was raised from $30,000 to $40,000.
The Government will continue to monitor the situation closely and will roll out more support measures for businesses, where necessary.