1. The Ministry of Finance is seeking public feedback on 26 proposed legislative amendments under the draft Income Tax (Amendment) Bill 2010. We also seek feedback on the proposed addition to the list of automation equipment and software for automating processes under the Income Tax (Automation Equipment) Rules.
2. Your views on the legislative amendments that give effect to policies announced in Budget 2010 will help us improve the draft legislation with regard to clarity and compliance by taxpayers. The policies themselves had been adopted after feedback and debate in Parliament.
3. For the legislative amendments relating to the non-Budget changes, we welcome comments on both the policy and drafting aspects of the proposed amendments.
SCOPE OF THE CONSULTATION EXERCISE
4. The draft Income Tax (Amendment) Bill 2010 incorporates 26 proposed legislative amendments to the Income Tax Act as follows:
(a) Budget 2010 changes. These are the tax changes announced by Minister for Finance Mr Tharman Shanmugaratnam in the 2010 Budget Statement. The key Budget Tax changes include:
- Productivity and Innovation Credit ("PIC") scheme to promote investment in six activities along the innovation value chain;
- Tax allowance and stamp duty relief to defray the cost of mergers & acquisitions (M&A);
- Land Intensification Allowance to support enhanced land productivity among industrial users. The Industrial Building Allowance (IBA) will be phased out, but existing claimants can continue to claim their remaining IBA on qualifying buildings until their allowances are written down;
- Tax deduction scheme for angel investors to claim deductions for their investments in start-ups and young companies; and
- Enhancement in various personal income tax reliefs such as the parent and handicapped parent reliefs, dependent-related reliefs, and course fee relief.
(b) Non-Budget 2010 changes. These changes to existing tax policies and administration arise from on-going reviews of the income tax system. These refinements include:
- Enhancement on Global Trader Program (GTP) to include structured commodity finance activities as qualifying activities to be incentivised; and
- Provision of Unique Identification Numbers (UINs) and Unique Entity Number ("UEN") by Institutes of a Public Character ("IPCs") of their donors to facilitate IRAS' administration of tax deduction benefits for such donations.
5. The Income Tax (Automation Equipment) Rules will also be updated and expanded to include a wider range of qualifying equipment and software for automating processes, Taxpayers can claim accelerated capital allowance over one year for these equipment and software, instead of three years for capital allowance in general.
6. The summary tables (Budget 2010 Changes and Non-Budget 2010 Changes) lists all the legislative changes and explains the amendments to the Income Tax Act.
7. We would appreciate your support to ensure that the consultation exercise is productive and focused. Respondents are requested to follow these guidelines:
a. Identify yourself as well as the organisation you represent (if any) so that we may follow up with you to clarify any issues, if necessary.
b. Make your comments clear and concise.
c. Use the prescribed template provided to help us understand your feedback better.
d. Focus your comments on how the legislative amendments can be better written to make them clearer and to make compliance easier.
e. Explain your points with illustrations, examples, data or alternative formulations of the amendments as far as possible.
8. This draft legislation is released only for the purpose of consultation and should therefore not be used for individual or business decisions as it does not represent the final legislation or regulations. All comments received during the consultation exercise will be reviewed thoroughly and, if accepted, will be incorporated in the Bill for introduction in Parliament.
PERIOD OF CONSULTATION
9. The draft Income Tax (Amendment) Bill 2010 is available for public consultation from 28 June to 19 July 2010. We regret that comments received by the Ministry after 19 July 2010 will not be considered as they will be too late for incorporation into the final Bill.
10. We encourage all interested participants to submit your comments via our online submission form. Using this online submission form is the easiest and quickest way for your comments to reach us for consideration.
You can also send us your comments, using the prescribed template, through:
a. email to firstname.lastname@example.org; or
b. fax to 6337 4134; or
c. post to: Ministry of Finance
100 High Street, #10-01
SUMMARY OF RESPONSE
11. We will publish on the Ministry of Finance website a summary of the main comments we receive together with our responses by end August 2010. The summary will not disclose the identity of respondents, and will not separately address or acknowledge every comment received.
DOCUMENTS TO DOWNLOAD
12. For your convenience, the relevant documents relating to this public consultation exercise can be downloaded for further reference. Please click here
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