PIC reimbursements doubled to $60,000

Businesses are promised more money for upgrades made under the Productivity and Innovation Credit (PIC) scheme.

The bigger earmark was unveiled as an additional $2 billion was allotted for National Productivity Fund by the Singapore government. DPM Tharman Shanmugaratnam announced the additional business incentive over the weekend during his budget speech.

Companies can begin applying for PIC reimbursements starting July 1, 2012 and payouts will be staggered on a quarterly basis instead of a lump sum at the end of the fiscal year.

"We introduced a number of major new measures to help businesses address this challenge over the past two years. First, we provided broad-based support through the Productivity and Innovation Credit scheme, or PIC, which I will further enhance in this year's Budget. Second, we set aside $2 billion for the National Productivity Fund (NPF), which will provide more targeted support for industry efforts to restructure and upgrade over the next decade. Third, we are investing significantly in Continuing Education and Training (CET) to help our workers develop new skills and expertise and increase their versatility," said DPM Tharman Shanmugaratnam.

"We have received useful suggestions on how we can improve the PIC further, from business groups such as the Singapore Business Federation - SME Committee. I will introduce a few changes in this Budget," he added.

"To give businesses more cash upfront for their investments, I will enhance the PIC scheme to provide a 60% cash payout for up to $100,000 of firms' PIC expenditures. This means a $60,000 payout from the Government, compared to the $30,000 given previously. This is a substantial subsidy for any SME investing in its workers or its operations. It is especially useful to companies with limited taxable income, which would not be able to benefit fully from the PIC tax deduction," he said further.

"Next, they will get their cash payout faster, to help them with their cash flow. From 1 July 2012, companies will be able to apply for and obtain their cash payouts on a quarterly basis instead of having to wait till the end of their financial year," he said.

"I will also make it easier for companies to claim PIC benefits on their in-house training costs, by removing the requirement to have these training programmes certified by the Singapore Workforce Development Agency (WDA) or Institute of Technical Education (ITE). This will be for in-house training costs of up to $10,000 per year, which will cover the majority of training initiatives by smaller companies," he added.