Critical Changes In The Budget Of 2014 For The Benefit Of SMEs
Singapore is always aiming to change for the better. The government is constantly advocating the improvement of small and medium enterprises (SME). Looking for great ideas, the Government of Singapore has firstly introduced programmes to improve the skills of the workforce of Singapore. It is important to raise the productivity and quality of output to improve the Gross Domestic Product (GDP) of the country. The new policies that have been framed with the feedback gathered from the implementation of the policies of 2013 would make an impact and encourage entrepreneurs to incorporate a company in Singapore.
The important changes that have been made in the budget of 2014 are the following:
Extension of PIC Scheme – The Productivity and Innovation Scheme (PIC) Scheme was launched to encourage SMEs to improve innovation and productivity within the business. SMEs that invest in the qualifying productivity and innovation activities defined by the Inland Revenue Authority of Singapore (IRAS) can enjoy tax deductions or cash payouts. The scheme has been well-received and was successful in improving the productivity of many SMEs. Hence, the government has extended the scheme three (3) more years. Supposedly ending in 2015, the scheme has been extended to improve the productivity of more SMEs. The Deputy Prime Minister Tharman has introduced PIC+ Scheme that would assist companies to make more fruitful investments to grow their business. Mr. Tharman is very positive that this scheme would motivate more entrepreneurs to incorporate a company in Singapore.
New solution to minimize the cost of SMEs
The Government of Singapore has taken necessary steps to lower the cost of production for SMEs. It seeks to heighten opportunities in established industries by increasing demand of products and services, resources allocation, and simplifying operations. Emerging entrepreneurs can enter the market and would be able to survive in the competitive market by reducing the cost of production.
Tax incentives to boost confidence – To achieve strategic advantage, it is important to boost the confidence of SMEs. The Government of Singapore has introduced tax incentives for SMEs involved in the Research and Development (R&D) industry. Businesses in the R&D sector will receive 50% additional tax incentive for the expenditures that were made for creating new products, services, and technology for ten more years. Other tax deductions would be implemented by Economic Development Board for another five years.
Financial Assistance for Companies – To advance the development of the SME sector, the government seeks to provide sufficient financial assistance. The Government of Singapore has introduced the second phase of Co-investment Programme (CIP) to support new and existing entrepreneurs to expand their business.
Introduction of Micro–loan programme (MLP)
The Micro Loan Programme (MLP) for SMEs offered by Standards, Productivity and Innovation Board (SPRING) allows qualified small to mid-sized enterprises to apply for a loan of up to S$100,000. Locally incorporated small to mid-sized enterprises that have been incorporated for less than three (3) years in Singapore with a staff size of ten (10) employees or less may apply for the said loan. Moreover, the company must have at the very list thirty (30) per cent local shareholding and a Group Annual Sales not exceeding $100,000,000.
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