More micro-enterprises are taking up a tax rebate scheme aimed at spurring firms to boost productivity.
Among companies with revenues of less than $1 million a year, about a quarter claimed benefits under the Productivity and Innovation Credit (PIC) last year, up from one in five the year before, said Senior Minister of State (Finance & Transport) Josephine Teo.
Mrs Teo was responding to Ms Jessica Tan (East Coast GRC), who had asked if the criteria for claiming benefits under the PIC scheme could be reviewed to benefit micro-enterprises.
The PIC scheme, introduced in 2010, gives tax deductions or cash payouts to firms if they take steps to boost productivity.
These include automation and training.
Members of Parliament also raised questions about the effectiveness of government schemes aimed at raising productivity.
Despite the resources being channelled, labour productivity fell 0.3 per cent in the second quarter - its sixth straight quarter of decline, said Ms Foo Mee Har (West Coast GRC).
Non-Constituency MP Lina Chiam questioned if "improvements in innovation can be objectively measured".
In response, Mrs Teo said raising productivity is "a medium- to long-term endeavour", and comparisons should be made across decades.
In the process of economic restructuring, "we can expect short term productivity fluctuations due to economic cycles and volatility".
She added that the Inland Revenue Authority of Singapore (Iras) - which administers the scheme - has been reaching out to small businesses to educate them about the PIC, and will not hesitate to take action against fraudulent claims.
Get a copy of The Straits Times or go to straitstimes.com for more stories.