Second Reading Speech By Mrs Lim Hwee Hua, Minister in Prime Minister's Office, Second Minister for Finance and Transport, On The Property Tax (Amendment) Bill 2010

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

2     The proposed changes in the Property Tax (Amendment) Bill 2010, or the PTA Bill for short, arose from the periodic review of our property tax regime. These amendments will improve tax administration and provide greater clarity on the tax liability to taxpayers.

2010 PROPERTY TAX ACT CHANGES

3     Sir, I will highlight three salient amendments. The other amendments are technical or administrative in nature.

(a) Streamlining reporting requirements for property owners

4     Currently, property owners are required to inform the Inland Revenue Authority of Singapore (IRAS) upon the occurrence of certain events such as whether the property ceases to be occupied by the owners or if the property has been rebuilt.  These events may affect the property tax payable and the current reporting requirement provides IRAS with the necessary information to re-assess the property tax accordingly.

5     With the proposed amendment, property owners will no longer need to inform IRAS upon the occurrence of certain events¹ such as when the building is completed, rebuilt, enlarged, altered or improved. The reporting requirement can be eliminated for such events as IRAS will obtain the required information directly from other Government agencies. Clause 5 of the Bill reflects these changes.

(b) Fine-tuning the definition of "structural networks"

6     The next change relates to property tax on structural networks. In 2008, the Property Tax Act was amended to clarify that structural networks, including a network of pipelines, are taxable.

7     We propose to amend the definition of "structural networks" in the Property Tax Act to make it clear, for avoidance of doubt, that even a single pipeline may be regarded as a structural network for purposes of the Act. This is irrespective of whether the single pipeline constitutes the entire structural network, or the single pipeline is a part of a larger structural network.

8     Further, it will be made clear that property tax can be levied on the installed parts of a network that is currently in use or intended to be in use. For example, a network of pipelines that has been installed but has yet to be put to active use for distribution or transmission is liable to property tax. Clause 2 of the Bill reflects these changes.

(c) Aligning of time-bar to recover outstanding property tax

9     The third change pertains to the reduction in the time limit for the recovery of Property Tax from six years to five years. This reduction is in alignment with the five year time-bar period for tax recovery under other Tax Acts (e.g. Income Tax Act and GST Act). The change will be effective from 1 Jan 2012, to provide time for transition. Clause 9 of the Bill provide for this change.

CONCLUSION

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

¹ Events that IRAS still need property owners to report on include: i) when any property ceases to be occupied by the owner; and ii) when any building or part of a building which is liable to the payment of property tax is demolished or removed.