Second Reading Speech By Mrs Josephine Teo, Minister of State for Finance and Transport On The Stamp Duties (Amendment) Bill 2011

1. Mr Speaker, Sir, I beg to move, “That the Bill be now read a second time”.

Background

2. The Stamp Duties (Amendment) Bill 2011 comprises eight amendments. Two amendments give legislative effect to Budget 2011 initiatives, while the remaining six amendments arise from the periodic review of our stamp duty system.

3. Sir, let me first touch on the provisions in the Bill that give legislative effect to the two measures announced in Budget 2011.

4. Firstly, stamp duty relief will be made available for a company converting into a Limited Liability Partnership (LLP), subject to conditions. This relief provides more flexibility for companies restructuring to LLPs. Clause 4(a) of the Bill provides for this change.

5. Secondly, we will remove most fixed and nominal stamp duties of $2 and $10 on documents executed on or after 19 February 2011. This streamlines our stamp duty regime and reduces taxpayers’ compliance cost. Clauses 2, 3, 6, 7(a), 8, 12 and 13 provide for this change.

6. Sir, I shall now deal with the other tax changes covered in this Bill that arise from the periodic review of our stamp duties policies and administration. Let me highlight two of these changes.

7. In Budget 2010, I had announced the stamp duty relief for qualifying mergers and acquisitions (M&As). Clauses 5 and 14 propose changes to align conditions for stamp duty relief, such as the qualifying period, more closely to the conditions in the income tax allowance for qualifying M&As. This will provide for greater consistency and ease compliance.

8. Currently, the Minister for Finance can impose conditions to be applied generally for any reduction or remission of stamp duty. Clause 11 provides flexibility for the Minister for Finance to waive the conditions for any relief, remission or exemption of stamp duty for specific cases.

9. The other salient provisions in the Bill serve to improve tax administration or provide clarifications to the law.

Conclusion

10. Mr. Speaker, Sir, I beg to move.