Artificial Intelligence (AI) is now a central pillar of Singapore’s economic strategy. Under Budget 2026, the Government has introduced a comprehensive set of initiatives to help businesses adopt AI, innovate faster, and build future-ready capabilities.
These measures go beyond funding — they combine tax incentives, grants, infrastructure, workforce training, and national-level coordination to accelerate AI transformation across key industries.
1. National AI Missions to Transform Key Sectors
The Government will launch AI Missions to tackle complex, high-impact challenges and deploy AI solutions at scale.
The initial focus will be on four sectors:
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Advanced manufacturing
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Connectivity
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Financial services
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Healthcare
These missions will align:
✔ Research & development
✔ Regulations
✔ Investment promotion
This ensures faster development → testing → deployment → scaling of AI solutions.
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2. New National AI Council
A new National AI Council, chaired by the Prime Minister, will:
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Set the strategic direction for Singapore’s AI ambitions
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Oversee AI Missions
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Unlock resources and regulatory support
Importantly, the Council will also draw on private-sector expertise, strengthening public-private collaboration.
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3. “Champions of AI” Programme for Leading Companies
A new programme will provide tailored support for firms that are ready to:
🚀 Transform their entire business using AI
🚀 Scale advanced use cases
This signals a shift from basic adoption → enterprise-wide AI transformation.
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4. Enhanced Enterprise Innovation Scheme (EIS) – New AI Tax Deduction
The Enterprise Innovation Scheme (EIS) will be enhanced for YA 2027 and YA 2028 to directly support AI adoption.
New AI Tax Incentive
Businesses can now enjoy:
✅ 400% tax deduction
✅ On up to $50,000 of qualifying AI expenditure per YA
⚠ This new AI category cannot be converted into the cash payout option.
Expanded Partner Institutions
The list of qualifying partners will include:
➡ Sectoral AI Centre of Excellence for Manufacturing
This makes it easier for companies to collaborate on AI innovation.
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5. Productivity Solutions Grant (PSG) Expanded for AI
More AI-enabled solutions will be pre-approved under PSG.
This helps SMEs:
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Adopt AI tools faster
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Automate existing processes
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Improve productivity with lower upfront cost
PSG remains one of the most practical entry points for smaller businesses.
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6. New AI Park at One-North
JTC will develop a dedicated AI Park at One-North to:
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Bring together startups, researchers, and corporates
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Test-bed AI solutions
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Foster partnerships
This strengthens Singapore’s position as a regional AI innovation hub.
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7. TechSkills Accelerator (TeSA) Expanded to Non-Tech Professions
AI capability is no longer limited to IT roles.
TeSA will now support AI training for non-tech sectors, starting with:
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Accountancy
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Legal
This is especially important for professional services firms, as AI will reshape:
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Audit
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Tax
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Compliance
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Advisory workflows
8. Free Premium AI Tools for Training Participants
To encourage hands-on learning, Singaporeans who attend selected AI courses will receive:
🎁 6 months’ free access to premium AI tools
This promotes real workplace adoption — not just theory.
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What This Means for Businesses
For SMEs
You can start with:
✔ PSG-supported AI solutions
✔ AI training for your workforce
This lowers the cost of entry significantly.
For Scaling Companies
You can:
✔ Claim 400% tax deduction under EIS
✔ Partner with AI centres of excellence
✔ Join the Champions of AI programme
For Professional Firms (Accounting, Legal, Consulting)
This is a major opportunity to:
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Redesign workflows using AI
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Upskill teams through TeSA
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Move into higher-value advisory services
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Quick Summary of Key Measures
| Area | Support |
|---|---|
| AI Missions | Sector-wide transformation programmes |
| National AI Council | Central strategy and coordination |
| EIS enhancement | 400% tax deduction for AI expenditure |
| PSG expansion | More AI solutions for SMEs |
| AI Park | Innovation and collaboration hub |
| TeSA expansion | AI training for non-tech roles |
| Free AI tools | 6-month premium access for trainees |
Strategic Takeaways
Singapore is not just encouraging AI adoption — it is:
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Building a national AI ecosystem
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Supporting end-to-end transformation
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Targeting both SMEs and large enterprises
For businesses, this means:
📌 AI is no longer optional
📌 Early adopters will enjoy tax and grant advantages
📌 Workforce transformation must start now
Disclaimer: This article is for informational purposes only and does not constitute tax or compliance advice. Employers should consult tax professionals or refer to official IRAS guidance for tailored instructions.
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