Major firms and institutions Singapore Chinese Chamber of Commerce and Industry (SCCCI), Ernst & Young, and Deloitte Singapore have recommended the Singapore government to refine and extend the Productivity and Innovation Credit (PIC) scheme.
Introduced in 2010, the productivity and innovation credit (PIC) was implemented to encourage innovation and productivity in businesses. Read more about the PIC scheme here.
With many local businesses benefiting from the attractive tax deductions and payouts, it is little wonder that tax teams and specialists monitor how much this scheme has boosted productivity and innovation in SMEs.
The average length of extension requested by these influential companies range from three to five years. The Singapore Chinese Chamber of Commerce and Industry (SCCCI) is urging the government to extend the scheme by another three years until 2018, while Ernst & Young has proposed to extend it for another five years. The scheme is set to expire in March 2015, the end of the Government’s 2014 financial year.
In the professional opinion of Business Incentives Advisory partner at Ernst & Young, Ms Tan Bin Eng commented that, “Efforts to encourage productivity and innovation will be short-lived if the PIC is phased out, especially when investments in productivity are just beginning to take off.”
According to the Deloitte Singapore tax team, a specialist has recommended that the extension of the PIC scheme with an the increase in enhanced deduction for qualifying PIC spending and simplifying the criteria for companies to claim the benefits will directly will boost productivity and innovation further, which makes Singapore a more attractive location to do business in.