Singapore Budget 2025: Announcements for individuals

Impact

This benefits all tax resident individuals with chargeable income above SGD 20,000.

Insights

This is a continued effort by the government to provide relief for lower-income taxpayers.

Whilst the rebate is appreciated, we were hoping to see a higher amount to provide more relief for taxpayers. 

Impact

• This may discourage companies from hiring individuals above 55 years old as this increases their employer CPF costs from previous years.​
• For the individuals, the increase in CPF contributions goes into their Retirement Account (RA) and should enhance retirement affordability and defray increased healthcare costs. 

Insights

• Since 1 January 2022, the Government started raising CPF rates for those aged between 55 and 70 to, in effect, increase the retirement age. ​
• For those aged between 65 and 70, there should not be any further increases to their CPF contribution rates from now until 2030.​
• For those aged between 55 and 65, the CPF contribution rates will continue to rise until they have met the government-set target contribution rate by 2030.​
• For certain sectors (e.g. in the cleaning, food services and retail), the additional costs to hire individuals above 55 years old may be passed on to consumers. ​
• With the increased costs (in wages and in CPF costs), the one-year CPF Transition Offset may do little to help companies with a larger population of mature employees.

Impact

This aligns with the tax treatment applied for the Matched Retirement Savings Scheme (MRSS) where cash top-ups to the Retirement Account (RA) or Special Account (SA) of an MRSS-eligible CPF member that attract the MRSS matching grant will not entitle the giver to the CPF Cash Top-Up Relief.

Insights

The MMSS matched contribution provides a greater benefit than the tax relief because it directly increases the amount (and interest) for the eligible CPF members.

This rule prevents double-dipping of both the matched contribution and additional tax relief.