Real rentals affect annual value26 Apr 2006
We refer to Mr Jeffrey Ho Loon Poh's letter "Higher taxes on the other hand" (April 17) and Mr Ahmed Ibrahim's letter "Landed property doesn't reflect ground reality" (April 18).
Mr Ho has asked for the basis for the increased annual value (AV) of his property.
The AV is the estimated annual rent that the property can fetch if it were rented out. In Mr Ho's case, the recent increase in the AV of his property is based on the actual rentals of similar types of properties in the estate he stays and in the neighbouring estates.
It is also important to note that the AVs may also be adjusted downwards if the rental market softens. Indeed, we have reduced the AV of Mr Ho's property a few times between 2001 and last year, in tandem with the market rentals then.
An owner who disagrees with the AV assessed on his property can write to the Inland Revenue Authority of Singapore (Iras) giving his grounds of objection and other information to support his case.
To facilitate the review, taxpayers are requested to provide the necessary information in the prescribed form which can be downloaded from the Iras website at www.iras.gov.sg. A taxpayer can also call Iras at 1800 356 8600 for clarification on his property tax matters.
Mr Ahmed has noted that the AV of an individual's place of residence is not a perfect indicator of his wealth. We agree. But there is no perfect method for assessing an individual's means.
AV and Assessable Income provide reasonable, even if imperfect, proxies for us to design a generally fair and simple system that can be applied to 2.3 million Singaporeans. Otherwise, the Government will have to investigate the financial circumstances of each and every Singaporean. Doing so will be intrusive and make the scheme complex and complicated.
HAN KOK JUAN
DIRECTOR (SOCIAL PROGRAMMES)
MINISTRY OF FINANCE