INCOME TAX ORDINANCE (Addition to First Schedule)

4.47 p.m.

The Minister for Finance (Dr Goh Keng Swee): Mr Speaker, Sir, I beg to move,

That this Assembly, pursuant to subsection (1) of section 106 of the Income Tax Ordinance (Chapter 166), resolves that the Federal Land Development Authority and the Local Land Development Boards and Corporations, set up under the Federation Land Development Ordinance of 1956, be added to the First Schedule to the said Ordinance with effect from the first day of January, 1959.

4.48 p.m.

[Mr Deputy Speaker (Mr G. Kandasamy) in the Chair]

The Minister for Finance (Dr Goh Keng Swee): Section 106 (1) of the Income Tax Ordinance gives power to the Legislative Assembly, by resolution, to add to, vary or revoke the whole or any part of any Schedule to the Ordinance. The First Schedule to the Ordinance specifies the institutions, authorities, persons or funds whose income is exempted from income tax under section 13 (1) (e) of the Ordinance.

The Federation Government is now seeking to include its Federal Land Development Authority, established under the Federal Land Development Ordinance, No. 20 of 1956 of the Federation of Malaya, in the First Schedule to the Income Tax Ordinance and so exempting its income from income tax.

With regard to Local Land Development Boards and Corporations, Part III and Part IV of the Federation Land Development Ordinance provide for their establishment to further the main objects of the Ordinance. These Boards and Corporations will themselves have funds which may produce an investment income before the money is fully absorbed in development schemes.

The money, which the Federal Land Authority has invested and the Land Development Boards and Corporations may invest in Singapore, is in fact Federation Government money employed temporarily to earn interest until needed. As such, it is justifiable to exempt from income tax the interest from these investments, on the general principle that Governments do not seek to tax each other. In this connection, I may point out that the Governments of Singapore and the Federation appear respectively in the First Schedules of the Federation and Singapore Income Tax Ordinances.

The Comptroller-General of Income Tax, Malaya, and the Malayan Board of Income Tax have recommended that the Federal Land Development Authority and its Boards and Corporations be included in the First Schedule and the Government has accepted the recommendation of the Board.

Sir, I beg to move.

Question put, and agreed to.

Resolved,

That this Assembly, pursuant to subsection (1) of section 106 of the Income Tax Ordinance (Chapter 166), resolves that the Federal Land Development Authority and the Local Land Development Boards and Corporations, set up under the Federation Land Development Ordinance of 1956, be added to the First Schedule to the said Ordinance with effect from the first day of January, 1959.