To lower the income tax rate of companies, trustees and non-resident persons from 22% to 20% with effect from Year of Assessment (YA) 2005. The following tax rates which are presently pegged to the company income tax rate are also corresponding reduced:

(i) rate of withholding tax;

(ii) rate of deduction of tax from Singapore franked dividend paid on or after 1 January 2004;

(iii) rate of tax to be used to compute the effective company tax rate for a body of persons.

Sections
35(5), 43, 44(20), 44A(4), 45(1), (1A), (2), 45B(2) and 46(2)

[Clauses 16(a), 23 (a), 27, 28, 29(b), (c), 31 and 32 ]

Clause 23 (a) amends section 43 to reduce the tax rate of companies, trustees and non-resident persons from 22% to 20%.

Clause 29(b) amends section 45 to provide for the reduction in the rate of tax to 20% to be deducted from the gross amount of interest made to any non-resident person.

Clauses 16(a), 27, 28, 29(c), 31 and 32 make consequential amendment to section 35(5), 44(20)(g), 44A(4), 45(1A), 45B(2) and 46(2) respectively arising from the reduction in the company tax rate.

As part of Government's efforts to encourage entrepreneurship, the first S$100,000 of the normal chargeable income (excluding Singapore dividends) of qualifying new companies will be fully exempt from income tax.

This tax exemption will apply to each of the first 3 Years of Assessment of qualifying companies that fall within YA 2005 to YA 2009. The first YA of a qualifying company corresponds with the basis period during which the company is incorporated.

Where a company does not meet the qualifying conditions, the company would still be eligible for the partial tax exemption under section 43(6) of the Income Tax Act (ITA).

Section 43

[Clauses 23(d), (e), (h), (j)]

Clause 23(d), (e), (h) and (j) amends section 43 to provide for an amount up to the first S$100,000 of the normal chargeable income (excluding Singapore dividends) of any qualifying company to be exempt from tax for each of the company's first three consecutive years of assessment which fall within the years of assessment 2005 to 2009.

To encourage companies to provide high value-added processing services which support financial activities to financial institution, a 5% concessionary rate of tax is granted on specified income derived on or after 27 February 2004 by approved companies. Approval for the incentive will be granted within a 5-year period from 27 February 2004 to 26 February 2009.

Clause 26 inserts a new section 43R. The new section 43R provides that a 5% concessionary rate of tax shall be levied on specified income derived by an approved company on or after 27 February 2004 from the provision of prescribed processing services in Singapore to any financial institution.

Clause 24(b) makes a consequential amendment to section 43D(3) arising from the insertion of new section 43R by clause 26.

Clause 46 makes consequential amendments to section 13B(1), (2), (8)(a), 13E(12)(b) and 37B(7) arising from the insertion of new section 43R by clause 26.

To further develop the trading of commodity derivatives in Singapore, a 5% concessionary rate of tax is introduced for specified income from commodity derivatives trading derived on or after 27 February 2004 by approved companies.

[Clauses 26 and 46]

Clause 26 inserts a new section 43S. The new section 43S provides that a 5% concessionary rate of tax shall be levied on specified income derived by an approved commodity derivatives trading company from prescribed transactions in commodity derivatives or commodities. This shall apply to qualifying income derived on or after 27 February 2004.

Clause 46 makes consequential amendments to section 13B(1), (2), (8)(a), 13E(12)(b) and 37B(7) arising from the insertion of new section 43S by clause 26.

Under the CPF Minimum Sum Topping-Up Scheme, individuals are allowed to make top-ups to the CPF Retirement Accounts belonging to themselves, their spouses, parents and grandparents. Currently, individuals making such cash top-ups enjoy a tax relief of up to $6,000 per year. To encourage Singaporeans to save for retirement, the tax relief cap of $6,000 is raised to $7,000 per year, with effect from YA 2005.

The scope of tax relief is also expanded to cover CPF top-ups in cash by taxpayer for his spouse who is 55 years or older and whose income is not more than $2,000 in the year preceding the year of top-up, with effect from YA 2005.

[Clauses 19(h), (i) and (j)]

Clause 19(h), (i) and (j) amend section 39(3) and (4) to provide for deduction to an individual who has paid money into his spouse's retirement account and for raising the amount of deduction under section 39(3) to $7,000, subject to conditions.

To enhance the role of Singapore as a regional asset management hub, the following tax changes were made:

(i) expansion of the list of income that do not form part of the statutory income of Designated Unit Trust (DUT);

(ii) deeming distribution made by DUT out of the expanded list of income in (i) to be income of the unit holder if he is not a foreign investor.

[Clause 5 (c), (d), (e), (f), (g), 16(b), (c)]

Clause 5(c) inserts a new subsection (20A) to section 10 to extend the types of income which, if they do not form part of the statutory income of the designated unit trust, shall be deemed to be income of the unit holder if he is not a foreign investor.

Clause 5(d) makes a consequential amendment to section 10(23) arising from the insertion of the new section 10(20A) by clause 5(c).

Clause 5(e), (f) and (g) amend section 10(23) to define certain terms used in the section arising from the insertion of the new section 10(20A) by clause 5(c).

Clause 16(b) inserts a new subsection (12A) to section 35 to exclude certain income referred to in section 10(20A) from the statutory income of any designated unit trust.

Clause 16(c) makes a consequential amendment to section 35 arising from the insertion of the new section 35(12A) by clause 16(b).

To enhance the development of the short-term debt market, the QDS scheme will be expanded to cover discount income arising from discount debt securities issued during the period 27 February 2004 to 31 December 2008. The tenure of qualifying discount debt securities must be one year or less, and the conditions currently applicable in respect of interest derived from QDS must also be met.

Discount debt securities are debt securities issued at a price that is less than the face value of the securities, with no periodic coupon payment. For the purpose of tax incentive, the term "discount" does not include those that arise from trading in secondary market.

Currently, non-resident individuals related to the issuer of QDS, or whose funds to acquire the QDS are from persons related to the issuer, are subject to 50% test in section 13(2) of ITA. This test will also apply to discount debt securities which are QDS and the tenure of which is one year or less.

Where the non-resident individuals are unable to qualify for tax exemption on such discount by virtue of section 13(1)(aa) and 13(2A) of ITA, they may qualify for the tax exemption on such discount under section 13(1)(ze)(ii). This similarly applies to interest from QDS derived by non-resident individuals.

[Clauses 9(a), 9(f), 21, 25(a), 25(b) and 30]

Clause 9(a) inserts a new paragraph (aa) to section 13(1) to provide exemption from tax on discount derived by certain non-residents from certain qualifying debt securities.

Clause 9(f) excludes certain discounts from the tax exemption under section 13(1)(aa).

Clause 21 amends section 42(6) and (7) to provide for discount derived by a body of persons from certain qualifying debt securities to be taxed at the rate of 10%, subject to conditions.

Clause 25(a) inserts a new paragraph (aa) to Section 43N(1) to provide for discount derived by a company from certain qualifying debt securities to be taxed at the concessionary rate of tax of 10%.

Clause 25(b) amends section 43N(2) to provide the circumstances under which the concessionary rate of tax in section 43(N)(1)(aa) shall not be applicable.

Clause 30 amends section 45A to provide for waiver of withholding tax on discount on certain qualifying debt securities liable to be paid to non-resident persons subject to conditions.

To facilitate the use and exploitation of intellectual properties in Singapore, the rate of withholding tax on royalties will be reduced from 15% to 10%. This reduced rate will apply for royalties that are payable to non-residents on or after 1 January 2005, provided that such royalties are:
(i) not derived by the non-resident from a trade, business, profession or vocation carried on or exercised by him in Singapore and
(ii) not effectively connected with any permanent establishment in Singapore of the non-resident. For the purpose of the reduced rate, the royalties shall be income referred to in section 12(7)(a) and (b) of ITA. Such royalties shall exclude those referred to in section 10(14) and (16) of ITA which are derived by a person not resident in Singapore, as well as payments for the rendering of assistance or service in connection with the application or use of scientific, technical, industrial or commercial knowledge or information. Royalties referred to in section 10(14) and (16) of ITA will continue to enjoy the concessionary treatment of having such consideration received being deemed as the lower of:
(i) the amount of the royalties or other payments remaining after the deductions allowable under Parts V and VI have been made; or
(ii) an amount equal to 10% of the gross amount of the royalties or other payments.The reduced rate of 10% is a final tax.

[Clauses 20, 23 (b), (c), (f), (i), 29(a), 33]

Clause 23 (b), (c), (f), (i) amends section 43 to provide for tax at a rate of 10% on the gross amount of royalties accruing to or derived by a non-resident person not from any trade, business, profession or vocation carried on or exercised by him in Singapore and not effectively connected with any permanent establishment in Singapore of the person.

Clauses 20, 29(a) and 33 make consequential amendments to section 40(5), 45(1), (2) and 48(5) respectively arising from the insertion of new section 43(3A) by clause 23(c).

To retain and attract international ship owners and operators to Singapore, the scope of tax exemption for a approved AIS company is extended to cover income derived from chartering of ships to residents or permanent establishment in Singapore. In addition, the list of qualifying ships under the scheme is expanded to also include any vessel used for offshore oil or gas activity.

Further, exemption from tax is granted for charter payments made by AIS approved companies to non-residents (excluding permanent establishments in Singapore) for the charter of any vessel used for offshore oil or gas activity.

These changes take effect from Year of Assessment 2005.

[Clauses 5(a), 9(b) and 10]

Clause 9(b) amends section 13(1)(o) to extend the tax exemption to cover payment by an approved international shipping enterprise to non-resident person (excluding any permanent establishment in Singapore) for the charter of any vessel used for offshore oil or gas activity.

Clause 10 amends section 13F(1) to extend the tax exemption to cover the following income derived by an approved international shipping enterprise-
(a) income from charter of certain foreign vessels to any person in Singapore, subject to conditions;
(b) income from the operation or charter of any vessels used for offshore oil or gas activity, subject to conditions.

Clause 5(a) makes a consequential amendment to section 10(5) arising from the amendment of section 13F by clause 10.

To facilitate the remittance of offshore funds by resident individuals for investment and management in Singapore, all foreign-sourced income received in Singapore on or after 1 January 2004 by resident individuals will be exempt from tax. This tax exemption does not cover foreign-sourced income received by an individual through a partnership in Singapore

To further encourage the investment and management of funds by resident individuals in Singapore, specified Singapore-sourced investment income derived by individuals from financial instruments will also be exempted from tax. This exemption will exclude such investment income derived by individual through a partnership in Singapore or from the carrying on of a trade, business or profession.

The exempted Singapore-sourced investment income includes distributions made to resident individuals by designated unit trust on or after 1 January 2004 out of income referred to in section 10(20)(b) and (c) of ITA. As for distributions made by designated unit trust out of income referred to in section 10(20)(a) to resident individuals, the distribution continues to be exempt from tax in the hands of such individuals under section 10(21) of ITA.

In addition, interest income derived by individuals on or after 1 January 2005 from the deposit of moneys in Singapore will be exempt from tax.

The introduction of these tax exemptions help to ensure that the tax exemption for foreign-sourced income of resident individuals does not bias individuals against investments in Singapore instruments. It will also simplify and align our tax treatment of different kinds of investment income, and encourage individuals to save and to plan for their retirement.

[Clause 9 (e), (g), (h), (i), (j)]

Clause 9(e) amends paragraph (zd) and inserts a new paragraph (ze) to section 13(1). The amended paragraph (zd) provides that interest derived on or after 1st January 2005 by any individual from the deposit of moneys shall be exempt from tax. New paragraph (ze) exempts from tax certain income derived from Singapore on or after 1st January 2004 by any individual (other than income derived by him through a partnership in Singapore or from the carrying on of a trade, business or profession).

Clause 9(g) deletes section 13(5) arising from the insertion of new subsection (7A) to section 13 by clause 9(h).

Clause 9(h) inserts new subsection (7A) to section 13 to exempt from tax income arising from sources outside Singapore and received in Singapore on or after 1st January 2004 by any individual resident in Singapore (other than income received by him through a partnership in Singapore) . It also makes consequential amendment to section 13(8).

Clause 9(i) makes a consequential amendment to the definition of "deposit" in section 13(16) arising from the amendment of section 13(1)(zd) by clause 9(e).

Clause 9(j) defines the term "securities lending or repurchase arrangement" in section 13(16).

Currently, the tax incentive is granted on specified income derived by specified futures members from qualifying transactions in foreign currency denominated futures contract or approved new derivative products.

To encourage development of indigenous financial products, the tax incentive is expanded to include specified income derived on or after 27 February 2004 by specified futures members from qualifying transactions in Singapore dollar futures or approved derivative products. For the purpose of qualifying for the tax incentive, futures members must still transact with qualifying counterparties.

[Clause 24(a)]

Clause 24(a) amends section 43(D)(1) to extend the concessionary rate of tax to cover specified income derived from qualifying transactions in futures or approved derivative products denominated in Singapore dollar.

To provide administrative convenience to taxpayers, taxpayers who maintain their financial accounts in non-Singapore dollar functional currency in accordance with the Singapore Financial Reporting Standards (SFRS) would be able to furnish their (a) tax computations and (b) financial accounts denominated in their non-Singapore dollar functional currency.

These changes will take effect for businesses for accounting periods beginning on or after 1 January 2003.

[Clause 36]

Clause 36 inserts new sections 62A and 62B.
(a) New section 62A provides that subject to section 62B, the basic rule is for tax computations and particulars of income furnished together with an income return under section 62 or 71, to be denominated in Singapore dollar.
(b) New section 62B(1) provides that where a person or precedent partner carrying on a trade, business, profession or vocation maintains his financial accounts in a non-Singapore dollar functional currency in accordance with the Singapore Financial Reporting Standards (SFRS), such person or precedent partner shall furnish tax computations and particulars of income furnished together with an income return made under section 62 or 71 denominated in that functional currency in accordance with the provisions of section 62B.

Section 62B primarily lays out:

(a) Items in respect of which the amounts in a non-Singapore functional currency have to be converted to an equivalent amount in Singapore dollar in the tax computations
(b) The exchange rate to be used when converting any amount in Singapore dollar to an equivalent amount in a non-Singapore dollar functional currency or vice versa.

To account for the following CPF changes:

(i) change of CPF monthly ordinary wages ceiling from $6,000 to $5,500 from 1 January 2004;

(ii) new capping formula for Additional Wage from 40% of total Ordinary Wages to 5 months' of the prevailing ordinary wages ceiling (i.e. $5,500*5 = $27,500);

(iii) employer's CPF contribution rate change from 16% to 13% from 1 October 2003.

[Clauses 6, 12, 19(c), (d), (e), (k), (l) and (m))]

Clause 12 inserts a new sub-paragraph (F) to section 14(1)(e)(i) to provide that the deduction allowable to an employer for contributions to Central Provident Fund or designated pension or provident fund in respect of any of his employees from 1 October 2003 shall not exceed 13% of the remuneration paid by the employer for the employee.

Clause 19(c), (d), (e) amends section 39(2)(h) to reduce the maximum relief given to a self-employed individual in respect of his voluntary contributions to the Central Provident Fund from $25,380 to $21,780.

Clauses 6, 19(k), (l) and (m) make consequential amendments to sections 10C, 39(6) and (10) respectively in light of the changes in the maximum amount of ordinary and additional wages in respect of which mandatory contributions to the Central Provident Fund should be made.

The authority to approve an Institution of a Public Character for the purpose of ITA has been delegated by Minister for Finance to the Comptroller of Income Tax.

Clause 17(a), (b) and (c) amend section 37 to provide for the delegation of the authority of the Minister to the Comptroller to approve an institution of a public character.

Clause 44(b) and (c) make consequential amendments to section 107(3) arising from the amendment of section 37 by clause 17.

The changes are:

(i) To empower Minister to make regulations to specify the manner and criteria to be adopted by Central Fund Administrators for the (a) approval, (b) extension and (c) revocation of approvals for institutions of a public character.

(ii) To empower Minister to make regulations to specify conditions to be satisfied by an institution of a public character when the institution makes any change to its constitution or governing instrument.

[Clause 44(a)]

Clause 44(a) amends section 107 to empower the Minister to make regulations to provide for the manner and criteria to be adopted by Central Fund Administrators for the approval, extension or revocation of the approval granted to an institution of a public character and to impose conditions to be satisfied by that institution when it makes any change to its constitution or governing instrument.

Currently, a Singapore permanent resident leaving Singapore permanently or a foreigner ceasing employment in Singapore, with unexercised ESOPs and unvested shares from ESOW plans are subject to tax on the basis that the unexercised ESOPs and unvested shares are "deemed exercise" at the time they cease employment in Singapore.

This change gives employers the alternative to track the individuals after their exit from Singapore to determine the actual gains accruing to such individuals at the time of exercise/vesting/lifting of the restriction on ESOPs or shares under any ESOW plan. Tax would then be paid on these actual gains to the Comptroller of Income Tax, subject to certain conditions.

Currently, an employer that grants an individual who is a Singapore citizen or a permanent resident a right or benefit to acquire shares in a Singapore-incorporated company, is required to submit a return containing the gain or profit derived by the individual as computed under section 10(6) of ITA, notwithstanding that the individual may have ceased to be employed by him at the time the gain or profit is derived.

The requirement for employers to submit the return is now extended to cover all employees, regardless of whether they are Singapore citizens or permanent residents.

[Clauses 5 (b), 37(a), 39]

Clause 5(b) inserts a new subsection (7A) to (7C) to section 10 to enable the Comptroller to accept an undertaking from the employer of an individual to whom section 10(7) applies.

The new subsection (7B) provides that if the undertaking is accepted, the individual shall be assessed under section 10(6) instead of section 10(7).

The new subsection (7C) provides that notwithstanding the undertaking, the gains or profits derived by the individual from the right or benefit to acquire shares in a company may be assessed under section 10(7) and deemed to be income accruing to him in the year in which the condition imposed by the Comptroller is not complied with.

Clause 37 amends section 68(2B) to require an employer to submit an annual return of any gain or profit derived by any individual (excluding a director to whom the new section 68(2C) applies) from any right or benefit granted to him to acquire shares in any company incorporated in Singapore.

Clause 39 amends section 73 to enable the Comptroller to make an assessment on an individual to whom section 10(7B) or (7C) applies within the year in which the income accrues or is deemed to accrue to him, as the case may be.

The Act is amended to require an employer to submit a return, within a specified time period, and report any gains derived by a non-resident director from the exercise, assignment, release or acquisition of any right or benefit to acquire shares in any Singapore-incorporated company. This requirement would apply regardless of whether the non-resident director has ceased to be employed by the company at the time the gain is derived.

Clause 37 inserts a new subsection (2C) to section 68 to require a company to submit within 30 days, a return of any gain or profit derived by its non-resident director from any right or benefit granted to him to acquire shares in any company incorporated in Singapore.

Clause 39 amends section 73 to enable the Comptroller to make an assessment in respect of income which accrues to a non-resident director under section 10(6), within the year in which such income accrues to the director.

To help retain domestic funds in Singapore and encourage resident individuals to remit their funds that are currently placed offshore back to Singapore, the interest derived during 1 January 2003 to 31 December 2004 from the deposit of moneys in POSB savings accounts with the Development Bank of Singapore Ltd is fully exempt from tax. Deposits below $100,000 in POSB savings accounts with the Development Bank of Singapore Ltd are already exempt from tax currently.

Clause 9(c) inserts a new paragraph (ua) to section 13(1) to provide that any interest derived during 1 January 2003 to 31 December 2004 by an individual resident in Singapore from the deposit of moneys in excess of an aggregate amount of $100,000 in one or more of his POSB savings accounts with The Development Bank of Singapore Ltd shall be exempt from tax.

To encourage companies to use Singapore as its logistics hub, a new tax incentive is introduced. The new tax incentive allows approved companies to claim (subject to conditions) further tax deductions on approved logistics expenses incurred in Singapore. This incentive is effective from 1 July 2004 to 30 June 2009.

Clause 13 inserts a new section 14C to allow a further deduction to approved companies in respect of approved logistics expenses incurred by them, subject to conditions.

To remove combined assessment with effect from YA 2005. To ensure that no one will be worse off from the removal of combined assessment:

(i) husbands will be allowed to claim the full wife relief of $2,000 as long as the wife's income is not more than $2,000 in the preceding year.

(ii) transfer of unabsorbed capital allowances, trade losses, and donations will be allowed between husband and wife who are living together.

(iii) Any capital allowances, trade losses and donations must first be set off against the assessable income of the individual who incurred the allowances, expenses and donations.

(iv) Any excess can then, upon election by both the individual and his or her spouse, be transferred to his or her spouse in the order of capital allowances, trade losses and donations.

(v) For any qualifying deduction to be transferred, any capital allowances, losses or donation (as the case may be) arising to the transferor in an earlier year of assessment shall be transferred first before any allowance, loss or donation arising to the transferor in a later year of assessment.

Clause 18 inserts a new section 37D to provide for the transfer of unabsorbed capital allowances, losses or donations (qualifying deductions), both current year and brought forward from previous years, between spouses who are living together.

Clause 19(a) amends section 39(2)(a) to provide wife relief of $2,000 to a resident individual whose wife's income was not more than $2,000 in the year preceding the year of assessment.

Clause 34 amends section 51 to charge the income of a married woman in her own name, instead of that of her husband.

Clause 2 redefines the term "earned income" arising from the insertion of new section 37D by clause 18.

Clauses 7 and 8 amend sections 10D and 10H respectively arising from the insertion of section 37D by clause 18 to clarify that certain capital allowances and trade losses under those sections are not to be transferred between spouses under section 37D. (Section 10D and 10H discuss how income is derived in the case of finance/operating lease and carrying out the business of hiring out motor cars /providing driving instructions. Any unutilised Capital Allowance/losses are not allowed for transfer under group relief in these two cases too.)

Clauses 11, 15, 19(f), (n), 22, 35, 43 and 45 make consequential amendments to sections 13N, 31(2), 39(2)(m), 39(11)(a), 42A(2), 62, 93 and Fifth schedule respectively arising from the amendment of section 51 by clause 34.

Clauses 14 and 17(d) make consequential amendments to sections 23(3), 37(5) and (8)(b) respectively arising from the insertion of new section 37D by clause 18.

Currently, individuals who contribute to the Supplementary Retirement Scheme (SRS) and Central Provident Fund (CPF) are allowed tax relief for their contributions, subject to a cap.

As a concession, Not-Ordinarily-Resident (NOR) individuals are allowed to apportion their gross employment income according to the amount of time spent within and outside Singapore, and be taxed based on their apportioned employment income.

The amendment clarifies that the maximum amount of tax relief that NOR individuals may claim in respect of their SRS and CPF contributions shall be computed based on the apportioned employment income, and not the gross employment income.

Clauses 19(b) and (g) insert new provisos to section 39(2)(g) and (o) to clarify that the amount of deduction allowable to an NOR individual in respect of his contributions to the Central Provident Fund or SRS account shall not exceed the allowable contributions computed based on his apportioned employment income.

Clauses 19(o) and (p) define certain terms used in section 39 arising from the insertion of provisos to section 39(2)(g) and (o) by clause 19(b) and (g).

IRAS will be replacing its information system, Inland Revenue Integrated System (IRIS) with a new system, Inland Revenue Interactive Network (IRIN).

To enhance customer service, IRIN will enable the provision of electronic services to taxpayers via individualised portals (e.g. electronic -notices and applications).

The ITA is therefore amended to provide electronic transactions and notices with the same legal force as paper documents.

Clause 2 amends section 2(1) to:
(a) define the terms "account with the electronic service", "authentication code", "electronic record", and "electronic service" arising from the amendment of section 8 by clause 3 and the insertion of new section 8A by clause 4;
(b) delete the definition of the term "return", which is no longer required with the repeal of section 71A by clause 38.

Clause 3 amends section 8 to enable any notice (except notices which must be served personally or by registered post) to be served on any person by transmitting an electronic record of the notice to that person's account with the electronic service. This is provided the person has given consent for the notice to be served on him through the electronic service. The clause also inserts a new subsection (3A) to provide the time such notice is deemed to have been served on the person.

Clause 4 introduces a new section 8A to:
(a) provide for an electronic service that enables (i) the filing or submission of returns, estimates, statements and documents by any person or his agent, and (ii) the service of notices by the Comptroller;
(b) make an electronic record of any return, estimate, statement, document or notice, or any copy or print-out thereof, admissible in court as evidence of facts stated therein if certain conditions are satisfied.

Clause 38 repeals section 71A, which is no longer required consequent upon the enactment of new section 8A introduced by clause 4.

Clause 40 makes an amendment to section 76(1) consequential to the amendment of section 8.

To increase the efficiency of the ITBR, the ITA is amended to empower the Minister to appoint Deputy Chairmen to the ITBR, who may preside over hearing committees in the same capacity as the Chairman.

In addition, the ITA is amended to require appellants and IRAS to state reasons for objecting to members of ITBR from being part of the hearing committee for specific cases and to allow the Chairman of the ITBR to assess the merits of the objections. This will better ensure that there are valid reasons for the objections and to all members of the ITBR are gainfully deployed for the appeal process.

Clause 41(a) deletes and re-enacts subsections (5) and (6) of section 78 to empower the Minister to appoint a Chairman and Deputy Chairmen from among the Board members.

Clause 41(a) inserts a new subsection (6A) to enable a Deputy Chairman to preside at Board meetings in the absence of the Chairman. In addition, it enables a Board member to preside at the meetings in the absence of the Chairman or any Deputy Chairman.

Clause 41(b) amends section 78(8) to provide that a hearing committee of the Board (which exercises, discharges and performs the powers, functions and duties of the Board) shall include at least the Chairman or a Deputy Chairman of the Board.

Clause 41(c) inserts subsection (10A) to (10C) to section 78 to specify the person who is to preside at every meeting of the committee of the Board.

Clause 41(d) amends section 78(11) to provide that the person who is presiding at a meeting of the Board or committee of the Board shall have a second or casting vote where there is an equality of votes in a particular matter before it.

Clause 42(a) amends section 79(2) to provide that a notice of appeal to the Board should include the reasons of the appellant for objecting to any members of the Board.

Clause 42(b) amends section 79(2A) and (3A) to provide that both the appellant and the Comptroller shall not be entitled to object to the Deputy Chairman of the Board presiding at the hearing committee of the Board.

Clause 42(c) amends section 79(3) to provide that the Comptroller is required to provide reasons for objecting to any member of the Board.

Clause 42(d) inserts new subsections (4) to (4D) to section 79 to enable the Chairman or Deputy Chairman of the Board authorised by the Chairman to determine whether the reasons for objecting to members of the Board are valid, and if the reasons are valid, the members of the Board objected to shall not attend the hearing of the appeal.