Social Transformation Budget in PIC Scheme

The over-riding subject of Singapore budget is making a real difference to shared spending. However, it’s about striking the accurate balance amount. 

In this year, budget puts emphasis on transformation; however this time the full impact is planned to be as much communal as economic. Now, the Govt. is also introducing design to raise business innovation and productivity. This is budget that strengthens common Singaporeans with commendable attention on funding to increase collective spending. Some Singaporean organizations are just starting transformation to innovation-base growth and productivity driven growth.   

It’s good to see support events like the innovation PIC scheme extended and enhanced for 3 years until 2018. No doubt, benefit like the PIC Scheme is not a ‘silver bullet’ to drive behavior however it’s important   that they’re available for long term to get traction and support. These efforts are required to become more innovative and productive. 

Furthermore, bid to increase productivity, the Govt. has also announced the PIC scheme which has been planned for medium and small sized companies with large investments for revamping this business. It’s a simple indication that this budget is used for quality of business in terms of deeper abilities and innovations.      

While the extension of development(R/D) and research tax incentive for next10 years to show that Govt. has replied to calls by traders for long term help them with their innovative support and efforts.  

The comprehensive timeframe would profit in business to improve and build up their present services and products. It’s a sign that management appreciates such actions.   

Towards a good society:-

Increased social spending is a feature of past budget because Govt. tries to grow the income gap. This is not an exception with improved and increased subsidies for school going children, raised central funds contributions for employees. A generous USD 8 billion package of healthcare profits has been designed to the honor of 1st generation of Singaporeans who can build the main state. 

There is ‘close link’ to the Govt.’s productivity focused on economic strategies with the increased social spending planned to drive. Because, any new spending initiative gets inquiries about how they’ll be supported. 

However the Govt. have used tax revenue to fund this operating revenue, spending can’t be sufficient to manage this increase in future. The competitors of that area have planned to reduce the corporate tax rate (for instance, Malaysia). It can be detrimental to Singapore‘s competitiveness to raise the tax rate at the costs of fund collection.

In the meantime, increasing individual GST and taxes is also based on political costs the management has to calculate properly. Some can argue that management must, by rule, open all possible innovative methods to handle these issues thus to keep social spending all sustainable while considering other non-tax revenue basis to fund these social program.   

Mechanized to growth  

A hard message is also contained for some industries to measure the high level policies to press-on with policies to change these corporations to increase the productivity.  This evolution can’t have any important impact on SME- with these companies being forced to down-size, change business, all on the name of revitalizing the SME prospect. This message is simple; they’ve no option to rebuild and to adjust the new economic environment. 

Supporting improvement

At the same time, the extension and enhancement of the pic bonus Singapore raises some interesting questions about just how beneficial it has proved to be as a measure to drive innovations. Recent research has also shown that management should improve productivity for effective business in Singapore. But the results are weaker in the innovative area- led growth statistics because taking up of PIC-scheme is shown that less than 3% of PIC-scheme has claims involved into some RD activate.    

It can be relevant to think whether any cause to take up is the un-certain interpretation of RD tax incentive scheme. The query of type of innovation is planned to be incentivized under the pic-scheme.  First of all, it should be very clear about innovation and strategies. It’s also important for both associated taxpayers and tax authorities. 

 

Because of this non alignment, there’s confusion about the policies of encouraging pervasive creativity in Singapore. Especially for SME and other services areas and the methods of tax-incentives are administered. We’re entering into the next section of growing business. It’s suitable that we’ve more clarity about the tax purpose and innovations.   

Finally, when business can’t view that there’s focused application industry for this scheme that is reliable with policies. The incentive will increase with its objective.  This is very critical point; we have to review the procedure of increasing the revenue in Singapore companies. 

Growth of S-M-Es

Moreover, noticeable is that focus on budget is done by challenging resources to SME to address the particular challenges in this industry. The incentive schemes and slew of funding is varied from encouraging the acceptance of I-C-T investment to help rebuilding of construction industries.  

With the improvements to financial schemes and global program this budget will boost your company and it has ability to do trade in global markets as well. It’s important stage, given the economic integration facilitated by ASEAN-Economic community- 2015 plan.  

However, some will argue about this budget but they will be few in number.  Singapore has to face all challenges as well as growth targets.  Singapore Budget must recognize the social and economic improvements required to go hand-in-hand for important long term progress. This is only main and important step which is provided by the executed and effective communications. 

Productivity & Innovation Credit (PIC) Scheme

• USD 400,000 of spending annually/ activity is combined across 2016-2018

• PIC payback is also allowed on training operating cost/individuals

PIC+ Scheme

• Applicable to an entity and SMEs (partnership, sole-proprietorship and company) succeed as an S-M-E when its yearly income is not more than USD 100 million. This industry will also evaluate it. From year 2015-2018
• Max USD 600,000 of spending annually/activity or combined costs of USD 1.2 million/ activity for 2013-2015.
• Similarly 6 qualifying activities like PIC-SCHEME