SINGAPORE - The popular Productivity and Innovation Credit (PIC) scheme should become a permanent fixture, but needs to be made more targeted in order to be effective.
This was among the key suggestions made by auditing firm KPMG in the run-up to the upcoming Budget.
The PIC scheme was introduced in 2010 and offers tax deductions or cash payouts to companies that invest in areas such as staff training, information technology or automation equipment to boost their productivity.
Multiple voices from the business community have called for the upcoming Budget to extend the PIC scheme and other well-known programmes like the Wage Credit Scheme, which will expire after this year.
The scheme is "relevant to businesses, and not just for the next five to 10 years," said KPMG in Singapore's head of tax Tay Hong Beng at a media briefing on Wednesday.
For it to remain sustainable and continue to effectively support Singapore companies, however, the scheme should be tweaked, added Mr Tay.
Companies should receive more support in boosting productivity during their first three years on the programme. They should then graduate on to the next stage of the scheme, which will last five years and provide help for innovation-driven activities and internationalisation.