Second Reading Speech by Minister for Finance, Mr Tharman Shanmugaratnam, on the Stamp Duties (Amendment No.2) Bill 201018 Oct 2010
Mr Speaker, Sir, I beg to move, "That the Bill now be read a second time".
2. The Stamp Duties (Amendment No. 2) Bill 2010 comprises five amendments. One amendment gives legislative effect to a Budget 2010 initiative, while the remaining four amendments arise from the periodic review of our stamp duty system.
3. In the Budget 2010 Statement, I had announced the introduction of a stamp duty relief and income tax allowance for qualifying mergers and acquisitions, or M&As. These tax concessions aim to facilitate corporate restructuring, especially amongst small and medium size enterprises. Under the stamp duty relief scheme for qualifying M&As, acquirers can be granted up to $200,000 of stamp duty relief per financial year for the acquisition of ordinary shares. This change takes effect from 1 April 2010. Clauses 3 and 6 of the Bill provide for this stamp duty relief for qualifying M&As.
4. I will now proceed to explain three other key non-Budget amendments in the Bill.
5. First, currently, based on the Interpretation Act, the Minister for Finance can impose conditions for any reduction or remission or stamp duty granted under Section 74 of the Stamp Duties Act. We will now provide for this power explicitly in the Stamp Duties Act. The amendment will also make clear that where the conditions imposed are not complied with, the amount of stamp duty earlier reduced or remitted will be recoverable as a debt due to the Government. Clause 9 of the Bill reflects this change. The change will take effect from the date of gazette.
6. Second, Section 15 of the Act currently provides for stamp duty relief for the reconstruction and amalgamation of companies, asset transfer between associated entities and conversion of a firm to a limited partnership. On any breach in the qualifying conditions for the stamp duty relief, the stamp duty earlier relieved can be recovered by the Government. We will amend the Act to provide that late payment of this stamp duty to be recovered will attract penalties. This change will take effect from the date of gazette of the Bill. Clause 2 of the Bill provides for this change.
7. Third, we will amend the Act to make explicit that the levy of the seller's stamp duty will apply to all transfer instruments for prescribed property transactions. Typically, in a property transaction, both parties concerned would first enter into a sale and purchase contract or agreement, before executing the conveyance instrument to transfer the property to the buyer. This amendment will make clear that the sellers' stamp duty will apply not just to contracts or agreements for the transfer of properties, but also to any conveyance instrument for the transfer of such properties without a contract or agreement. This amendment will take effect from 20 Feb 2010, which is when the SSD was introduced for residential properties sold within the prescribed holding period. Clause 4 of the Bill provides for this change.
8. Sir, the final legislative change being introduced arose from our periodic review of the stamp duty system. It is technical in nature and involves no policy change.
9. Mr. Speaker, Sir, I beg to move.