Parliament: New income tax Bill to curb abuse of PIC scheme, tweak SRS rules

SINGAPORE - A new Bill introduced in Parliament on Monday will seek to curb abuse of the popular Productivity and Innovation Credit (PIC) scheme, which dangles financial incentives for companies that restructure their operations to become more productive.

Businesses will now have to show that their IT and automation equipment is "in use" before they can claim cash payouts under scheme. Previously, companies merely needed to show that they had incurred the expenditure.

The Comptroller of Income Tax will also be allowed to deny PIC benefits arising from objectionable arrangements that seek to abuse the scheme, said Senior Minister of State for Finance Josephine Teo, who tabled the Bill on income tax changes in Parliament.

In addition, penalties will be imposed on intermediaries who promote or facilitate claims for PIC benefits under "abusive arrangements".

The new Bill also included changes to the Supplementary Retirement Scheme (SRS), a voluntary retirement savings programme that complements the Central Provident Fund system.

SRS members will now be allowed to transfer their investments to another investment account, such as their personal Central Depository accounts, without first having to liquidate them.