Applying for the Productivity and Innovation Credit (PIC) is a fairly simple affair - a business owner just has to fill out and submit a two-page form.
The PIC scheme offers firms a tax deduction or a cash payout for investing in productivity-boosting efforts such as automation.
Firms are also given a dollar-for-dollar matching cash bonus if they spend at least $5,000 a year to raise productivity, capped at $15,000 over three years.
The PIC application form is available on the Inland Revenue Authority of Singapore (Iras) website and it costs nothing to fill out and submit.
But recently, the Government-led SME Workgroup has uncovered cases of business consultancies charging hefty sums just to help small and medium-sized enterprises (SMEs) with this simple application process.
While not many cases have surfaced, Ang Mo Kio GRC MP Yeo Guat Kwang, who is part of the workgroup, said it was important to raise awareness of the issue before it became more widespread.
"The intention of the PIC is to make it easy for SMEs - no hurdles, auto approval.
"But the problem is that there are service providers who are applying on their behalf and quoting the firms big sums," he said in a recent interview with The Straits Times.
During a walkabout of neighbourhood retailers at Ang Mo Kio Central last month, Mr Yeo came across one such case - a consultant had charged a shopkeeper over $3,000 for helping him with his PIC application.
"I would urge the relevant agencies to look into this. We should put some strings on such agents," he said.
"For example, if the PIC submission is being made through an intermediary, we should get the intermediary to provide an itemised quotation with a clear breakdown of their charges."
A few cases have even resulted in legal tussles.
Ms Catherine Koh, chairwoman of the Tampines SME Association, spoke up during an SME Workgroup dialogue session last month to highlight one such case.
A design firm had engaged a consultant to help it claim a PIC cash payout for buying new equipment, she said.
"The company then received an invoice asking them to pay the consultancy a 30 per cent commission based on the cash payout they had received, so they paid," she told The Straits Times.
Soon after, the consultancy came knocking again, this time demanding a 30 per cent cut of the PIC bonus that the design firm had received too.
The firm refused to pay and the consultant responded with a lawyer's letter, Ms Koh said.
The firm has since sought assistance from the relevant Government agencies, which are looking into the matter, she added.
Consultants who spoke to The Straits Times said they do not usually market PIC application as a service, but do help clients when needed.
Mr Ken Leong, director of 361 Degree Consultancy, said he usually encourages clients to fill out the PIC application themselves.
"It's usually very straightforward. Helping with PIC applications might not be a service that gives clients much value-add," he said. For clients who do want help with more complicated PIC applications, however, the firm either charges a flat fee ranging from $300 to $1,200, or takes a 10 per cent cut from successful PIC rebates.
It has had fewer than 10 such clients, Mr Leong said.
Mr Gary Loh, director of PurpleClay Consulting, said the company provides complimentary assistance with PIC claims for existing clients, if they request it.
"However, we don't actively market it as a service because the process is very straightforward," he added.
An Iras spokesman said it is "not necessary for businesses to hire consultants to file their PIC claims."
Businesses seeking external help "should always obtain the consultants' advice in writing," he added.
"Some unscrupulous ones may try not to leave any documentary evidence of the advice they give.
"Businesses are ultimately responsible for the accuracy of the claims regardless of whether they file the PIC claims on their own or do so with the help of consultants."
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