1. The Ministry of Finance is seeking comments on the draft Income Tax (Amendment) Bill 2007 which sets out the legislative amendments to the Income Tax Act. We invite you to contribute comments on the amendments that have an impact on you. Your views are important as they would help improve the draft legislation.
SCOPE OF THE CONSULTATION EXERCISE
2. The draft Income Tax (Amendment) Bill 2007 incorporates amendments to the Income Tax Act relating to the following tax changes:
a. Budget 2007 tax changes. These are the tax changes announced by Second Minister for Finance Tharman Shanmugaratnam in his Budget 2007 Statement. Some of the highlights of the tax changes are:
- Reduction in corporate income tax rate to 18% with effect from the year of assessment 2008;
- Partial tax exemption for the first $300,000 of a company’s chargeable income with effect from the year of assessment 2008; and
- Tax exemption for registered charities without the need to satisfy any spending condition, with effect from the year of assessment 2008.
b. Other tax changes. These are changes or refinements to existing tax policies and administration resulting from on-going reviews of the income tax system. Some examples include:
- Deferral of section 19A capital allowance claims;
- Amendment to eligibility criteria for Parenthood Tax Rebate and Working Mother’s Child Relief;
- Enhancement and refinement of tax transparency treatment for Real Estate Investment Trusts.
3. The summary table lists all the tax changes and explains the amendments to the Income Tax Act.
4. The aim of this exercise is to obtain feedback on areas of the draft legislation that could be improved in terms of clarity or compliance by taxpayers. For the Budget 2007 tax changes, we are primarily seeking feedback on the drafting of the legislation as the policies have been adopted after feedback and extensive debate in Parliament. For non-Budget 2007 tax changes, we welcome comments on both the policy and drafting aspects of the proposed legislative amendments.
5. We hope to obtain feedback on the draft Income Tax (Amendment) Bill 2007. We seek your full support to ensure that the consultation exercise is productive and focused. Respondents are requested to follow these guidelines:
a. Please identify yourself as well as the organisation you represent (if any) so that we may follow up to clarify any issues, if necessary.
b. Make your comments clear and concise.
c. Please use the prescribed template provided to help us understand your feedback better.
d. Your comments should focus on how the legislative amendments can be better written to make them clearer and to make compliance easier.
e. Please explain your points with illustrations, examples, data or alternative formulations of the amendments as far as possible.
6. This draft legislation is released only for the purpose of consultation and should therefore not be used for individual or business decisions as it does not represent the final legislation or regulations. All comments received during the consultation exercise will be reviewed thoroughly and, if accepted, will be incorporated in the Bill for introduction in Parliament.
PERIOD OF CONSULTATION
7. The draft Income Tax (Amendment) Bill 2007 is available for public consultation from 15 June to 14 July 2007. Comments received by the Ministry after 14 July 2007 will not be considered as they will be too late for incorporation into the final Bill.
8. Please send us your comments, using the prescribed template, by:
a. email to email@example.com; or
b. fax to 6337 4134; or
c. post to: Ministry of Finance
100 High Street, #10-01
We particularly encourage comments through the prescribed template or by email as they will reach us faster and speed up the process of consideration.
SUMMARY OF RESPONSE
9. We will publish on the Ministry of Finance website a summary of the main comments we receive together with our responses by September 2007. The summary will not disclose the identity of respondents, and will not separately address or acknowledge every comment received.
DOCUMENTS TO DOWNLOAD
10. For your convenience, the relevant documents relating to this public consultation exercise can be downloaded for further reference. Please click here.