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Tax Act to carry changes, if any

14 Nov 2005

IN '10 proposals for Budget 2006' (ST, Nov 9), Mr Ivan Png wrote: 'Second Minister for Finance Raymond Lim agreed to consider reducing record-keeping rules and incorporate changes in next year's Budget.'

This is incorrect. Mr Lim said in Parliament on Oct 18 that any changes resulting from the ministry's review on this matter will be incorporated in next year's Income Tax Act amendments, not in the 2006 Budget Statement.

To recap, while there may be merits to reducing the record-keeping period for tax purposes, a holistic review is necessary to assess the implications of such an amendment, the possible tax leakages from this change, the real lessons from other jurisdictions, the necessary transitional provisions for the change and the impact of the amendment on record-keeping requirements for other purposes. It is not a decision to be made in haste.