Singapore Budget 2013 – Productivity Through Assistance
The Government’s decision to assist the Small And Medium Enterprises (SMEs) comes from the realization that over 50% of the economic output is contributed by them and that they also employ over 70% of the population in Singapore. The new budget was created keeping in mind that SMEs are the backbone of the economic output and that measures were needed in order to help improve their productivity and employment rate. This led to the creation of a workgroup headed by the Ministry of Trade and Industry (MTI) along with other business representatives, advisors and government agencies. The purpose of this workgroup is to help the SMEs overcome the basic problems that they face and help them improve their productivity by introducing various incentives, bonuses and opportunities for growth.
The help that they can expect to receive from the Government can be partitioned into three principal areas. Firstly, in terms of improving and the upgrading of workforce and productivity, more support will be provided by the Government. Secondly, the Government will help the SMEs to explore into new business opportunities and help in the globalization of their work by narrowing the communication link between the bigger and the well established SMEs and the smaller and new SMEs. Lastly, the Government aims to provide a more productive and conducive work environment for the SMEs by improving on many features such as creating opportunities for growth, helping in productivity and capability upgrading.
In order to boost productivity and innovation, the Government allowed in the Budget a Productivity and Innovation Credit bonus (PIC). All SMEs that invest a minimum of $5000 in activities that are related to improving the productivity or innovating the workforce are eligible to claim this bonus. This bonus is capped at $15000 over a period of 3 years. Hence, the eligible parties can claim a bonus amount equivalent to their investment. This is aimed to help the enterprises get back the money they spend on improving productivity. When a company creates a new product, they are entitled to Intellectual Property rights or Patent rights. The Government offers a cash rebate of up to 60% and a tax rebate of up to 400% to all companies that apply for these rights. This rebate is introduced to help boost the R&D departments of the companies and help them in creating new and improved products by offering incentives. The SMEs can also utilize the Wage Credit Scheme that is aimed at improving the working conditions of the locals. They are entitled to a 40% increase in their wages over a period of three years, thus offering a better incentive to work.
Another important area which the Government looks to improve is the increase in the employment of local talent pool. This is achieved by forcing the SMEs to pay higher salaries and levies to foreign employees. Apart from this, to attract a better local talent pool, the Government introduced a SME talent program me that is aimed at Polytechnic and ITE students. This program me trains the students and also promises them job opportunities upon completion of the program me. The Government also helps them to seize and utilize new business opportunities. This is done by introducing a Market Readiness Access Grant (MRA grant) that allows the enterprises to utilize the said grant in many areas such as market research, new productive ideas, consultation with experts, etc. A scheme between the local/small SMEs and the bigger and well established SMEs called the enhanced Partnership And Capability Transformation helps the two to communicate better and also help the smaller SMEs to share and import knowledge, co-innovate, etc. These are the various methods in which the Government seeks to improve the present conditions of the SMEs. Special care is taken to help them improve the key challenges and hardships they face while establishing or creating their workforce.
Need Company Registration Services in Singapore? Please Click: Company Registration in Singapore.