Cash bonus capped at S$15,000 is laudable.
Deloitte recently released its reactions on the Singapore budget.
Low Hwee Chua, Tax Partner, Deloitte Singapore, said, "The Government has finally made it simple for SMEs. The new PIC bonus scheme is itself
an innovative idea to incentivise businesses to make productivity investments. A dollar-for-dollar matching cash bonus capped at S$15,000 (over the three years from 2013 to 2015) for businesses that invest at least S$5,000 per assessment year to improve productivity, would certainly benefit SMEs the most."
"Given the rising business costs, one of the reasons frequently cited by SMEs for not being able to make full use of the current PIC scheme is the difficulty of putting aside cash to fund the investments. The scheme would therefore be most effective if the timing between the investment and the cash bonus is relatively short. Of course, the application process should also be made simple and straight forward," he added.
Here's more from Deloitte:
The PIC scheme was first introduced in Budget 2010 and further enhanced in Budget 2011 and Budget 2012. It is aimed to encourage businesses to invest in productivity and innovation with the objective of attaining long term sustainable productivity-driven economic growth.
Not surprisingly, it remains a major thrust of Budget 2013 as the Government continues to encourage businesses to intensify the efforts to achieve quality growth rather than manpower-driven growth.
To encourage small businesses to undertake meaningful productivity investments, businesses that invest a minimum of $5,000 per YA in qualifying activities under the PIC scheme will receive a dollar-for-dollar matching cash bonus subject to an overall cap of $15,000 for all 3 YAs combined.
To read Deloitte's full analysis on the Singapore budget, click here.
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