In the recent 2012 Budget Statement, Minister of Finance Mr Tharman Shanmugaratnam outlined several measures to help businesses in upcoming times.

Small and midsized enterprises (SMEs) looking to enhance their productivity can look forward to an improved Productivity and Innovation Credit (PIC) scheme.

The PIC gives tax benefits to companies investing in automation equipment and/or activities. These include hardware and software investments, as well as training.

Now thanks to Budget 2012, PIC now comes enhanced with:

Cash Payout Option Increased by 100%

If your company is a small and growing business, you can convert your hardware/software expenditure into a non-taxable cash payout.

• Increase in cash payout from 30% to 60% for up to $100,000 of expenditure per YA. This applies for YA2013 to YA2015.
• Claim cash payouts on a quarterly basis instead of financial year-end. This applies from 1 Jul 2012.
• Claims for in-house training costs will not require external certification, at a maximum coverage of up to $10,000 a year. This applies from YA2012.

Alternatively, you can select the 400% Tax Deduction/Allowances option. For YA 2011 to YA 2015, all businesses can enjoy deduction/allowances at 400% of their expenditure on each of the six qualifying activities, listed here.

Example: Spend S$40,000 in hardware and/or software --> enjoy up to S$160,000 tax deduction.

More information on the PIC and other tax benefits can be found here on the IRAS website.

Such Budget benefits will prove especially useful for small and midsized enterprises (SMEs) seeking to improve performance and growth. So make the most of opportune moments today. Contact us now and let us assist you in selecting the right ERP software and hardware for your company.

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