Public Consultations

INTRODUCTION

1. The Ministry of Finance is seeking public feedback on 37 proposed legislative amendments under the draft Income Tax (Amendment) Bill 2011. We invite you to comment on the proposed amendments.

2. Your views on the legislative amendments that give effect to policies announced in Budget 2011 will help us improve the draft legislation with regard to its clarity or its implications for efficiency of compliance by taxpayers. The policies themselves had been adopted after debate in Parliament.

3. For the legislative amendments relating to the non-Budget changes, we welcome comments on both the policy and drafting aspects of the proposed amendments.

SCOPE OF THE CONSULTATION EXERCISE

4. The draft Income Tax (Amendment) Bill 2011 incorporates 37 proposed legislative amendments to the Income Tax Act as follows:

   1. Budget 2011 changes. These are the tax changes announced by Deputy Prime Minister / Minister for Finance Mr Tharman Shanmugaratnam in the 2011 Budget Statement. The key Budget tax changes include:

      - Enhancement of the Productivity and Innovation Credit (“PIC”) Scheme to further encourage pervasive innovation and productivity efforts by increasing the amount of tax deductions and improving the PIC qualifying conditions;

      - One-off corporate income tax rebate of 20% up to $10,000; or SME cash grant of up to $5,000 to help companies with rising costs;

      - Introduction of the Foreign Tax Credit (“FTC”) Pooling System to allow businesses to pool their tax credits for foreign tax suffered so as to simplify compliance and reduce their tax payable on the remitted none income;

      - Introduction of the Maritime Sector Incentive (“MSI”) to enhance and streamline all existing maritime tax incentives under an umbrella incentive; and

      - Changes to personal income tax rate structure for resident individuals.

   2. Non-Budget 2011 changes. The changes to existing tax policies and administration arise from on-going reviews of the income tax system. These refinements include:

      - Taxability of Government Paid Childcare Leave Scheme to deem such payments to self-employed individuals as taxable income; and

      - Application of exchange of information (EOI) provisions to EOI agreements, in addition to tax treaties. The change allows Singapore greater flexibility to incorporate the internationally-agreed standard for exchange of information upon request for tax purposes in EOI-only agreements.

5. The summary table provides a brief description of the tax changes and explains the amendments to the Income Tax Act. Please refer to the draft Income Tax (Amendment) Bill and its accompanying Explanatory Statement for details.

GUIDELINES

6. We would appreciate your full support to ensure that the consultation exercise is productive and focused. Respondents are requested to observe these guidelines:

   1. Please identify yourself as well as the organisation you represent (if any) so that we may follow up with you to clarify any issues, if necessary.

   2. Make your comments clear and concise.

   3. Use the prescribed template provided to help us understand your feedback better.

   4. Focus your comments on how the legislative amendments can be better written to make them clearer and to make compliance easier or on how the tax policies can be improved (for non-Budget income tax changes).

   5. As far as possible, please explain your points with illustrations, examples, data or alternative formulations of the amendments.

7. This draft legislation is released only for the purpose of consultation and should therefore not be used for individual or business decisions as it does not represent the final legislation or regulations. All comments received during the consultation exercise will be reviewed thoroughly and, if accepted, will be incorporated in the Bill for introduction in Parliament.

PERIOD OF CONSULTATION

8. The draft Income Tax (Amendment) Bill 2011 is available for public consultation from 11 July 2011 to 1 August 2011. We regret that comments received by the Ministry after 1 August 2011 will not be considered as they will be too late for incorporation into the final Bill.

FEEDBACK CHANNEL

9. We encourage all interested participants to submit your comments via our online submission form. Using this online submission form is the easiest and quickest way for your comments to reach us for consideration.

   You can also send us your comments, using the prescribed template, through:

   1. email to pc_itabill@mof.gov.sg; or

   2. fax to 6337 4134; or

   3. post to:

      Ministry of Finance
      100 High Street, #10-01
      The Treasury
      Singapore 179434

SUMMARY OF RESPONSE

10. We will publish on this website a summary of the main comments we receive, together with our responses, by early September 2011. The summary will not disclose the identity of respondents, and will not separately address or acknowledge every comment received.

DOCUMENTS TO DOWNLOAD

11. For your convenience, the relevant documents relating to this public consultation exercise can be downloaded for further reference. Please click here.