The Productivity and Innovation Credit scheme – one year on

17 October 2012

During a recent Parliamentary sitting on 15 October 2012, the Ministry of Finance (MOF) gave an update on the take up rate on the Productivity and Innovation Credit scheme (PIC), ie:

  • For the Year of Assessment 2011, about 34,700 companies or 30% of active companies that have filed their tax returns claimed PIC.
  • Among active and small companies with annual turnover of $10 million or less, 27% or more than one in four have claimed PIC.
  • Of the six categories of investment eligible for PIC claims, automation equipment is the most popular, followed by training.
  • Generally, between 20% to 40% of the companies in each sector have made use of the scheme, including priority sectors as identified by the National Productivity and Continuing Education Council (NPCEC). For example, about 38% of the companies in the construction sector and 32% in the wholesale and retail trade sector have taken advantage of the scheme.

The second year of PIC data will be available after companies file their tax returns for Year of Assessment 2012 by November 2012.

Despite it being one year since PIC claims are allowed, the take-up rate has been promising, however the MOF has pointed out that the effectiveness of PIC is not just about the take-up rate, as many of the businesses have become more aware of the opportunities to enhance their productivity due to the efforts by trade associations and business chambers to share knowledge and best practices.

Source: Ministry of Finance