Page 10 - RSM Budget 2023 Highlights

CORPORATIONS AND BUSINESSES

 The enhanced tax deduction for qualifying
training expenditure is in line with the
Government’s effort to increase productivity
and our workforce quality so that businesses can
stay relevant in the current competitive
environment. A well-trained workforce will
translate into better employment and earnings
prospects for our people.

 The qualifying innovation expenditure cap
proposed of $50,000 appears low as compared
to other qualifying activities under the EIS.
Nevertheless, businesses are now able to claim a
deduction in respect of qualifying expenditure
incurred on new innovation projects carried out
with approved partner institutions. Businesses
can tap onto the partner institutions’ technical
and innovation capabilities in their innovation
journey and students from partner institutions
can also develop their own capabilities through
these projects. This is a win-win situation for
both businesses and partner institutions.

 The Government is aware that there will be
occasions when eligible businesses will not be
able to secure immediate or full benefits of the
EIS in view of low or no taxable profits derived in
the initial years of engaging in R&D, innovation
and capability development activities.
Businesses would no doubt be relieved to learn
that there is the cash payout option which would
provide them with the much needed cash flow.

 It remains to be clarified whether the unutilised
allowances/deductions arising out of the EIS
would form part of available trade losses of
companies, eligible for carry-back, carry-
forward and/or transfer under the group relief
provisions.

8 | RSM