MOF Accepts 28 Suggestions To Amend Draft Income Tax Bill

The Ministry of Finance (MOF) has accepted 28 out of 49 suggestions related to the drafting of the Income Tax (Amendment) Bill 2006, that were received during the consultation exercise held from 9 June to 8 July 2006.

2. Most of the comments were on:

(a) Corporate tax deduction for the cost of treasury shares used to satisfy obligations under employee equity-based remuneration schemes;

(b) Tax treatment of financial instruments arising from the adoption of Financial Reporting Standard 39;

(c) Tax treatment of gains from employee stock options granted prior to 1st January 2003;

(d) Tax treatment of trusts;

(e) Enhancements to the claim for Industrial Building Allowance; and

(f) Maritime Finance Incentive scheme (MFI).

3. The consultation exercise sought feedback on how the drafting could be improved for greater clarity and easier compliance. This is the fourth time that draft income tax legislation has been published for consultation. It is the first of a series of public consultation exercises on the different tax legislative changes planned for the year.

4. The comments which have not been accepted include those which suggested changes that are inconsistent with drafting convention or terms used in other tax legislation. Others went beyond the purpose of the exercise. They covered changes in tax policy and administration.

5. The Ministry of Finance thanks all respondents in this consultation exercise. The Ministry of Finance's responses to the major comments received are summarised on the MOF's website.

MINISTRY OF FINANCE