PIC scheme achieved goal despite misuse by some: Finance Minister

SINGAPORE – Despite it being dogged by cases of abuse, Finance Minister Heng Swee Keat felt that the Government’s Productivity and Innovation Credit (PIC) scheme has “largely achieved its objectives”.

The scheme was introduced in 2010 to provide funding for firms investing in innovation and productivity measures. However, over the years, cases of business owners who were caught abusing the PIC funds allocated to them have been reported, drawing questions about the fund’s effectivity.

In his speech rounding up the three-day Budget debate yesterday, Mr Heng told the House that as of January this year, 102,000 firms have benefited from the PIC scheme. He also cited a survey by the Singapore Chinese Chamber of Commerce and Industry which found that about nine in 10 companies were taking steps to increase their productivity.

Mr Heng added that the PIC was designed to raise awareness among smaller companies about productivity and to spur productivity improvement efforts. As such, with statistics reflecting that there is “broad-based” take-up of productivity initiatives, the Government is able to move on to the next phase of economic transformation.

In his Budget speech on March 24, Mr Heng had announced the S$4.5 billion Industry Transformation Programme, with targeted measures to help firms in each industry get ready for Singapore’s next phase of economic development.

In a written parliamentary reply on Tuesday, Mr Heng said the Government had investigated 488 cases of alleged fraud related to the PIC scheme as of the end of last year. Of this, eight led to prosecution and involved S$213,000 in cash payouts. Another three cases are pending trial.

Last month, Senior Minister of State for Finance Indranee Rajah also told the House that the tax authorities had clawed back about S$11 million in improper claims under the PIC scheme.

Moving forward, the cash payout under the PIC will be lowered from 60 per cent to 40 per cent for expenditures incurred on or after Aug 1. The scheme will expire by the end of financial year 2017.