Second Reading Speech by Second Minister for Finance, Mr Lawrence Wong on the Stamp Duties (Amendment) Bill 2018, at The Parliament, 10 Sep 201810 Sep 2018
Mr Speaker, I beg to move, "That the Bill be now read a second time".
2. The Stamp Duties (Amendment) Bill 2018 will give legislative effect to four main categories of changes to the Stamp Duties Act.
3. Firstly, in line with our Smart Nation efforts, the Stamp Duties Act will be amended to provide for stamp duty to be levied on electronic records that effect a transfer of interest in immovable properties and shares. Currently, such transfers are done via physical records, and stamp duty is levied where applicable. With the pervasive use of digital technology, there is potential for more of such transactions to be effected electronically, bringing greater convenience to citizens and businesses.
4. Today, the Stamp Duties Act does not expressly provide that an “instrument” has to be a physical instrument to be dutiable. Given its legislative history and the fact that some provisions in the Act operate on the basis of an “instrument” being in a physical form, the amendments will update the provisions and provide for how they are to apply to electronic records. This will ensure that our legislation keeps pace with digitalization and safeguards Singapore’s revenue where transfers are effected without a physical instrument. We have provided a validation clause to address any potential dispute over past payment and collection of stamp duties that have been made in relation to an electronic record.
5. The second change is to provide in the Act that the Minister can recover interest from a taxpayer who fails to comply with the remission conditions, in respect of upfront stamp duty remission that had been granted to him. The existing Act does not restrict the conditions that the Minister may impose when granting remissions, and it is an established practice today that remissions are granted on the basis of certain conditions. Failure to fulfil these remission conditions would result in recovery of the stamp duty that had been remitted, with interest.
6. When applying for upfront stamp duty remissions, taxpayers today sign an undertaking agreeing that interest is recoverable should they fail to comply with the remission conditions. Such cases mainly involve housing developers, who are granted upfront remission of the Additional Buyer’s Stamp Duty for their purchase of land for housing development. The key terms of the remission conditions require the housing developers to commence, complete and sell the development within a specified timeframe, failing which, the stamp duty earlier remitted will be recovered, together with interest, and that compensates the Government for the opportunity cost of the duties it would have received, had the remission not been granted. While the current arrangements have worked so far, we are making this amendment to make clear that the Government can recover interest when a taxpayer fails to comply with any of the remission conditions. We have provided a validation clause, to again address any potential dispute over the past payment and recovery of interest for a failure to comply with remission conditions.
7. Third, we will make amendments to Section 15 of the Act, which provides relief from stamp duty for corporate restructuring where there is no substantial change in beneficial interest of the transferred assets. The amendments will align our legislation with changes made to the stamp duty regime in recent years. For example, a firm is currently not able to enjoy relief from share duty, if its conversion to a Limited Liability Partnership attracts the Additional Conveyance Duty. Given that the policy intent remains not to charge duties under such circumstances, we have amended the legislation to provide relief from share duty under such circumstances.
8. The last category of change pertains to technical amendments arising from the Ministry of Finance’s periodic review to improve tax policy and administration. Today, IRAS has an E-Stamping system, which is an online portal for taxpayers to declare and pay stamp duties. Currently, the Act requires IRAS to seek the Minister’s approval for changes to the administration of the system, such as determining the information to be furnished by taxpayers under the E-Stamping system. We will amend the relevant provisions of the Act, to give IRAS the flexibility to make these changes, without having to seek the Minister’s approval each time. This will enhance IRAS’ nimbleness to meet its operational needs.
9. Mr Speaker, I beg to move.