Second Reading Speech by Mrs Lim Hwee Hua, Minister of State for Finance on the Inland Revenue Authority of Singapore (Amendment) Bill 2005, at The Parliament, 22 Apr 2005

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

Background

2. IRAS was set up in 1992 when IRAS was restructured from an MOF department into a statutory board. IRAS' functions as the tax authority of Singapore, as set forth in the IRAS Act, include the administration, assessment and collection of tax payments, and provision of valuation services for immovable properties.

3. The Bill will amend the Inland Revenue Authority of Singapore Act to allow IRAS to:

a) raise loans from the Government;
b) raise loans through credit facilities for purchase of goods or services;
c) raise loans from any source within or outside Singapore with the approval from Minister of Finance, including:

i. mortgages,overdrafts or other means, with or without security;
ii. charges on any property vested or on any other revenue receivable;
iii. debentures, bonds or any other instrument.

4. Sir, I shall now explain the proposed amendment.

Expansion of Borrowing Powers

5. Currently, the IRAS Act restricts IRAS to borrowing only from banks and other financial institutions but not to issue bonds, even though IRAS could issue bonds at lower interest costs.

6. The proposed amendment will give IRAS more options to raise funds from the capital markets. This will allow IRAS to be more cost-effective as it will be able to choose the option with the lowest borrowing costs to fund its projects. As a safeguard, loans from non-governmental sources will be subject to the approval of the Minister for Finance.

7. The same powers had been granted to NUS (National University of Singapore), NTU (Nanyang Technological University) and PUB (Public Utilities Board) when their Acts were amended last year.

Conclusion

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