We refer to the letter "Review productivity scheme payouts" (9 May) by Ms Tan Saw Bin. Ms Tan shared her concerns about possible abuses by consultants and vendors making claims for their clients under the Productivity and Innovation Credit (PIC) scheme.

The PIC scheme offers enhanced tax deductions and cash payouts for businesses that invest in productivity improvement activities. IRAS has kept the application processes for PIC simple and straightforward to encourage businesses, particularly small and medium enterprises (SMEs), to benefit from the scheme. That is why many SMEs have filed their PIC claims without the help of consultants. Some businesses, however, chose to engage consultants to help them with their PIC claims. Regardless of whether they do so on their own or with the help of consultants, businesses are responsible for the accuracy of the claims.

Since the introduction of the PIC scheme, IRAS has been conducting outreach programmes to help businesses understand how they can tap on the PIC to raise their productivity. Together with the industry associations such as Association of Small and Medium Enterprises (ASME) and Singapore Manufacturing Federation (SMF), government agencies such as ACRA and SPRING, IRAS also provides PIC advice to businesses in one-to-one and group settings.

Ms Tan has suggested that the coupling of the PIC cash payout and the PIC Bonus may lead to consultants and vendors inflating their prices to abuse the scheme. In our outreach programmes, IRAS emphasises the need to make accurate PIC claims and the consequences for making fraudulent claims. We are in the process of disseminating information to trade/industry associations on the common mistakes made by businesses and consultants on their PIC claims, and have put out the same information on our website. We take a serious view of any attempt by PIC claimants, vendors or consultants to artificially inflate the value of the PIC expenditure or investment, purely to abuse the PIC scheme. We will not hesitate to take actions against the offenders, including bringing them to court. Anyone who wishes to report on potential abuses of PIC scheme can write to IRAS and we will ensure that the identities of the informants are kept confidential.

Businesses that require more information or assistance on claiming PIC can refer to www.iras.gov.sg, or contact us at [email protected] or 1800 356 8622 (for companies) and 6351 3534 (for self-employed/partnership). Businesses are encouraged to sign up for the IRAS PIC seminar and the PIC Clinics.

We thank Ms Tan for sharing her views and suggestions with us.