MOF Invites Comments on Changes to the Income Tax Act28 Jun 2010
The Ministry of Finance will be conducting a public consultation on 26 proposed legislative amendments under the draft Income Tax (Amendment) Bill 2010, and the proposed addition to the list of automation equipment and software for automating processes (231 KB) under the Income Tax (Automation Equipment) Rules. The public consultation will run from 28 June to 19 July 2010.
2. The proposed amendments to the Income Tax Act ("ITA") principally relate to the changes announced in the 2010 Budget Statement. The key changes include the:
- Productivity and Innovation Credit ("PIC") scheme to promote investments in six activities along the innovation value chain;
- Tax allowance and stamp duty relief to defray the cost of mergers & acquisitions (M&A);
- Land Intensification Allowance to support enhanced land productivity among industrial users. The Industrial Building Allowance (IBA) will be phased out, but existing claimants can continue to claim their remaining IBA on qualifying buildings until their allowances are written down;
- Tax deduction scheme for angel investors to claim deductions for their investments in start-ups and young companies; and
- Enhancement of various personal income tax reliefs such as the parent and handicapped parent reliefs, dependent-related reliefs, and course fee relief.
3. The Income Tax (Amendment) Bill 2010 also provides for refinements to existing tax policies and tax administration arising from on-going reviews of our income tax system. These refinements include the following:
- Enhancement to the Global Trader Program (GTP) to include structured commodity finance activities as qualifying activities to be incentivised; and
- Provision of Unique Identification Numbers (UINs) and Unique Entity Number ("UEN") by Institutes of a Public Character ("IPCs") of their donors to facilitate IRAS' administration of tax deduction benefits for such donations.
4. The Income Tax (Automation Equipment) Rules will also be updated to include a wider range of qualifying equipment and software for automating processes. Taxpayers can claim accelerated capital allowance over one year for these equipment and software, instead of three years for capital allowance in general.
The public can access the consultation documents together with the explanations for the draft Income Tax (Amendment) Bill 2010 on the Ministry of Finance's website and the REACH consultation portal. Respondents may send their comments to the Ministry of Finance directly via the website, email, fax or post.
MINISTRY OF FINANCE
28 JUNE 2010