At Singapore’s Enterprise Development Centre (EDC) Conference held recently, it was described how with the assistance of the Inland Revenue Authority off Singapore (IRAS), small and medium-sized enterprises (SMEs) can be helped to understand the government’s Productivity Innovation Credit programme, reports Tax-News.com
EDCs were set up in 2005 to provide free business advisory services to SMEs, start-ups and entrepreneurs, and are part of the multi-agency EnterpriseOne initiative managed by SPRING Singapore, the business development agency, together with the support of 35 partners from the public and private sectors.
Teo Ser Luck, Minister of State for Trade and Industry, at the Conference, confirmed that the government is committing more resources to help SMEs improve productivity and develop innovative products to meet market needs more efficiently. The EDCs encourage SMEs to upgrade their core capabilities, leveraging on relevant government assistance programmes.
Over the years, the number of SMEs that have tapped on the EDCs’ resources and facilities has risen five times, from about 2,400 in 2005 to some 12,000 last year. Over the last six years, the EDCs have assisted some 60,000 SMEs, and SPRING now hopes to extend its reach to more than 20,000 SMEs annually.
In 2010, the EDCs introduced the Productivity Management Programme to help SMEs learn how to improve productivity, and, in 2011, the EDCs assisted some 2,200 SMEs in that respect.
In particular, from April to September last year, the EDCs together with IRAS conducted a total of 21 clinics to help some 300 SMEs understand the PIC. SMEs have said that they find the personalized consultation during the PIC Clinics useful as they could clarify questions on the coverage and tax benefits of the scheme.
Targeted at SMEs and other small businesses, an increased cash pay-out, as an alternative to tax deductions, is now available within the PIC. For example, recognizing the value of cash flow to small businesses, if a small business incurred SGD10,000 (USD7,950) worth of qualifying expenditure, it could previously get a cash pay-out of SGD3,000, and, from this year, double that at SGD6,000.
In addition, the cash pay-out can now be claimed at the end of each financial quarter, rather than at the end of each financial year, to ease an SME’s cash flow even further; and it has been made easier for businesses to claim the PIC for up to SGD10,000 of in-house training costs without the need for certification.
Given the positive feedback, the EDCs and IRAS will be conducting the free PIC Clinics again this year. Starting in May, the half-day clinics will be held every week until the end of October at the five EDCs and IRAS premises. About 500 SMEs are expected to benefit.
“The EDCs have been our key partners in reaching out to SMEs. In the past two years, they have expanded their assistance to helping SMEs raise productivity and tap tax benefits through the PIC,” said Chew Mok Lee, Group Director, Entrepreneurship & Innovation, SPRING Singapore.