Patrick Liew Siow Gian’s (“SMEs need more help to improve productivity”, TODAY, 27 Feb) commented that many SMEs are not sufficiently informed or equipped with the right personnel or expertise to apply for the Productivity and Innovation Credit (PIC) scheme. He also suggested that the Government organise educational programmes and hands-on training to guide enterprises.

Since the introduction of the PIC scheme in 2010, IRAS has been conducting outreach programmes to raise awareness and help businesses understand how they can tap on the PIC to raise their productivity. Together with the Enterprise Development Centres (EDCs) and government agencies such as ACRA and SPRING, IRAS provides PIC advice to businesses in one-to-one and group settings. To date, we have reached out to more than 850 businesses through the PIC Clinics and more than 33,000 business representatives through IRAS’ dedicated PIC seminars. Besides working with industry associations such as Association of Small and Medium Enterprises (ASME) and Singapore Manufacturing Federation (SMF) to reach out to more businesses, IRAS also publicised the PIC scheme through various media channels, where we shared success stories of SMEs benefitting from the scheme.

The take-up rate of PIC so far is encouraging; for active companies with at least one employee (who is not a shareholder), the take-up rate for Year of Assessment 2012 was 57%, including 52% of small companies with turnover of less than $10 million.

In order to better understand the challenges of businesses and to encourage higher take-up of the scheme, IRAS regularly seeks feedback from businesses, through various trade and business associations, on how the scheme can be enhanced to provide better support for businesses investing in innovation and productivity.

Based on businesses’ feedback, the PIC cash payout rate was increased in Budget 2012 from 30% to 60% of businesses’ PIC expenditures, to provide further support for smaller businesses with limited taxable income. , A PIC Bonus was introduced in Budget 2013 to encourage more businesses to undertake productivity improvements. Businesses that spend at least $5,000 in PIC activities in a year will receive a dollar-for-dollar matching cash bonus of up to $15,000 from Year of Assessments 2013 to 2015. The list of equipment qualifying for PIC was also expanded to include some basic tools of the trade, and will be reviewed regularly to keep pace with business needs.

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 which will be conducted on 24 Apr 2013 and the PIC Clinics at http://www.spring.gov.sg/pic/pages/pic-clinic.aspx

Claire Chua (Mrs)
Director (Corporate Communications)
Inland Revenue Authority of Singapore