SINGAPORE - The Government will lower cash payouts under the blanket Productivity and Innovation Credit (PIC) scheme as it moves towards more targeted measures, Finance Minister Heng Swee Keat said in his Budget address on Thursday (March 24).
The payout rate will be lowered from the current 60 per cent to 40 per cent for expenditures incurred on or after August 1.
Meanwhile, the 400 per cent tax deduction will remain unchanged, Mr Heng said.
The scheme, which has been extended for two years until the 2018 Year of Assessment, will thereafter expire, Mr Heng said.
The PIC scheme offers companies a cash payout or tax breaks when they invest in equipment or activities that will raise productivity.
This move comes as the Government is setting aside a total of $4.5 billion under a new Industry Transformation Programme to support enterprises and industries.
This sum is on top of amounts that have already been set aside for Research and Development (R&D), and the National Productivity Fund.
It includes the next tranche of increased funding to Spring, IE Singapore and Economic Development Board to support economic development.
"Our agencies will work more closely together, integrating their different support schemes to take a more targeted approach to developing each industry," Mr Heng said.