Launch of Productivity Solutions Grant (PSG), End of ICV
February 19, The Government of Singapore announced through Finance Minister HengSweeKeat that a new grant will be given to small and medium-sized enterprises in the country. The Productivity Solutions Grant(PSG) is a revamp of an earlier project launched by the government in 2013 known as the Productivity and Innovation Credit (PIC). The said grant will also bring an end to the Innovation and Capability Voucher program since ICV will be incorporated under the new grant.
The Ministry of Trade and Industry (MTI) aims to help more local businesses through the newly revised grant, the success of PICs assessment period from 2013 – 2015 has paved the way for the legalization of the new grant. The grant will be open to all local small and medium-sized businesses that passed the MTI’s qualifications. The grant is similar in aspects to PIC except in the varying difference of tax deductions which is now based on the improvement areas requested by the different SMEs.
Productivity Solutions Grant(PSG) grants a 70% reimbursement of capital used to improve the following aspects of an enterprise: automation of service equipment, staff training, registration for intellectual property rights, acquisition and in-licensing of intellectual property rights, approval of design projects and research and development. The 70% reimbursement does have a cut-off expenditure maximum of 100,000 dollars though. But never fret aside from the reimbursement, the government offers another alternative in the form of tax deduction of up to 250% to 200% with expenditure cost of a maximum of 100,000 to 150,000 depending on the area of improvement chosen. Enterprises opting to invest in research and development will be granted a 250% tax deduction for expenses not going beyond 100,000 dollars. Companies investing in internalization, on the other hand, will be given 200% tax deduction with a maximum expenditure of 150,000 dollars. The remaining areas of improvement will receive a 200% tax deduction on expenses, not beyond 100,000 dollars
With all these expenses expected to be incurred by the government, Senior Minister of State, Ms. Sim Ann announced on March 3 that the government will be setting aside 110 million dollars for the said grant. The grant is aligned with the industry Transformation Maps (ITM) program of the Ministry of Trade and Industry. It coincides with ITMs goals of building deeper partnerships between the government, the different industries as well as the various SMEs across the country.
The large budget given in the new grant eliminates the need for the current ICV program, which gives SMEs a 5,000 dollar voucher. Since the new grant gives a whopping 70% reimbursement of qualifying cost. The ICV program of SPRING Singapore will remain open until March 29, 2018, with the final wave of applicants being given a processing time of 2 to 4 weeks max.
The new grant guarantees more financial aid for SMEs from the government which is very good news indeed, especially for companies that require bigger updates! This is the Singaporean Governments efforts to give back to the sector of the economy which provides jobs to 7 out of 10 Singaporeans. SMEs make up 99% Singapore’s enterprises and contribute 50% of the country’s GDP.
If you are a local SME in Singapore and would like to apply for the Productivity Solutions Grant(PSG) or be one of the final recipients of ICV feel free to contact us. For more information, you can also read the step-by-step process on how to apply for Productivity Solutions Grant. We can help your sales grow as well as save you time in automating sales and marketing.
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