PIC to be scrapped after YA2018

MARKET watchers were largely approving of the government's decision to retire the Productivity and Innovation Credit (PIC) scheme after the current extension lapses, as part of its shift from more broad-based support to more targeted measures.

Indeed, while the extension of the scheme for YA2016 to YA2018 was appreciated by trade associations and chambers, most market watchers were not surprised that it will expire thereafter.

Chai Wai Fook, a partner in tax services at Ernst & Young Solutions said: "Some people may think the reduction is unexpected - some had even asked for increased cash payouts in the past - but if we look at the overall context, it does reflect the government's shift in approach, which is broad-based to now, a more targeted and industry-focused one. Viewed in that context it is not a surprise and does make sense under this current Budget announcement."