As Singapore continues to develop, increasing amounts of emissions will be released into the environment from more factories and motor vehicles. The demand for energy is also expected to increase significantly, bringing with it the potential for more pollution. The need to conserve energy and protect the environment cannot be over-emphasised. To achieve the objective of energy conservation and improving the quality of our air and water, industries are encouraged to install highly efficient pollution control devices and use highly energy-efficient equipment.

Currently, all enterprises are allowed to write-off their plant and equipment for tax purposes over three years. To encourage the use of highly efficient pollution control and energy-efficient equipment, I have decided to allow all expenditure on such equipment incurred with effect from 1 January 1996 to enjoy 100 per cent depreciation in the first year. This means that the qualifying expenditure on such equipment can be written off completely against the taxable income of the enterprise in the year following the year of purchase. If the enterprise does not have sufficient profits to take full advantage of the 100 per cent depreciation allowance, the balance will be available for deduction in subsequent years.

I hope that all enterprises in Singapore will take advantage of this concession to install highly efficient pollution control and energy conservation equipment as soon as possible. The scheme will be administered by the Ministry of The Environment. Details of the guidelines and qualifying criteria for these incentives are set out in Annexes I and II.