Industry Transformation Programme a timely move, say panellists

PANELLISTS at the Deloitte Budget Seminar 2016 have expressed their support for the government's plan to phase out the Productivity and Innovation Credit (PIC) Scheme and replace it with the more targeted Industry Transformation Programme (ITP).

The roundtable discussion was organised by The Business Times (BT), and moderated by its associate editor Vikram Khanna, in collaboration with Deloitte as part of the latter's full-day budget seminar.

Participants in the discussion are Deloitte SG and SEA tax partner Low Hwee Chua, Deloitte SEA indirect tax leader Robert Tsang, DBS group head of consumer banking and wealth investment Tan Su Shan, and CIMB private banking director and economist Song Seng Wun.

Mr Low thought that the PIC scheme had run its course and that the time was ripe for the government to implement more industry-specific measures.

His opinion was echoed by Mr Song, who added that the PIC was useful to start with as it got the innovation process going. But now that most SMEs have what they need, he believed that it is time for the government to look into other measures.

However, while Ms Tan agreed that the ITP makes efforts more focused, she thinks that there is a possibility the government may revert to the PIC in the future.

The way the economy is heading entails the blurring of industry lines, added Ms Tan. She cited examples of how "the world's largest taxi operator doesn't own a single taxi" and how "the world's largest room operator doesn't own a single hotel room" to explain the disruptive elements that are present in today's economy.

Ms Tan added that DBS faces competition from not just the other big banks, but potentially also the fintech companies, and even telco and retail services companies.

"But those guys (disruptive companies) are now part of my ecosystem and I can either join them, beat them or be killed by them," she added, describing the "ecosystem partnership" that exists in today's economy.

When the lines begin to blur, it becomes more difficult to implement industry-specific measures, therefore Ms Tan thought that the government may consider reverting to more macro strategies such as the PIC.

Other themes that came up during the discussion include millennials, Singapore's relevance going forward, encouraging SMEs (small and medium enterprises) to venture overseas and the Goods and Services Tax (GST).

The participants offered their own insights into the different topics, drawing from experience in their fields of work.

Investors are increasingly interested in South-east Asia, and have already begun "sniffing around", offered Ms Tan.

She also noticed a trend of Chinese companies seeing Singapore in a way that Singaporeans do not normally see.

Meanwhile, tax expert Mr Tsang personally expects that GST may rise in the long term.

Despite the other discussions, the theme of disruptive developments still dominated.

"Leaders have to be open to disruption and big changes. I think we can and will prevail.

But the kind of disruption (we face in the future) requires a big heart and big mind," Ms Tan concluded at the end of the discussion.

This article was first published on April 14, 2016.
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