In today’s Budget speech in Parliament, Singapore’s Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam announced that the government is launching three initiatives to subsidise information and communications (ICT) costs for local businesses until 2018.
The initiatives will cost S$500 million (US$395 million).
He also said that the government’s Productivity and Innovation Credit (PIC) scheme, which was introduced in 2010, will be extended until 2018. The scheme reimburses companies with tax deductions or cash grants when costs are made in line with productivity. It was supposed to expire this year, but it seems its popularity with startups in the city-state has warranted the extension, which will cost S$3.6 billion (US$2.8 billion).
According to The Straits Times, Shanmugaratnam added that the current cap of S$400,000 (US$316,000) on the eligible expenditure small and medium-sized enterprises (SMEs) make, will be increased to S$600,000 (US$473,000) in 2015 when the PIC scheme is assessed.
The extension of PIC does reveal the government’s support for innovation within the country. However, Clement Wong, Founder and CEO, Bemyguest, told e27 that IRAS, which handles the scheme, should improve it by hiring someone with knowledge when it comes to processing tech-related claims. He explained, “Many startups rely on PIC to survive. Delays in pay-outs can be detrimental.”
Wong added that the Singaporean travel startup claims about one fifth of its expenditure from the PIC scheme, and lamented, “Our submission last march is still being processed.”
Three initiatives to cut ICT costs
Read Also: Singapore startup government funding chart
Lead Image Courtesy: ShutterStock