PROPERTY TAX (AMENDMENT) BILL

Order for Second Reading read.

3.14 p.m.

The Minister for Finance (Mr Lim Kim San): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Bill now before Parliament envisages two major changes of substance to the existing Property Tax Ordinance. Section 2 of the Ordinance defines "annual value" and gives the Chief Assessor the option of adopting as an annual value a sum equal to five per cent of the capital value of the property in certain circumstances. But in the operation of the Ordinance, it has been found that the provision is not adequate to cover all cases. Under the existing law, the option applies where buildings are erected on land and also where the land is vacant. There has been doubt as to whether the option applies while buildings are in the course of construction and some litigation has already resulted from this doubt. The amendment will make it clear beyond doubt that the Chief Assessor may adopt an annual value of five per cent of the capital value of any property whether vacant land, land with buildings erected thereon, or land with buildings being erected thereon.

The Bill also clarifies the power of the Chief Assessor in respect of land appurtenant to any house or other building in excess of the quantity fixed by the Controller so that five per cent of the capital value may be adopted as the annual value of such excess land. There is no definition of "building" in the Ordinance at the present time, and one of the amendments made by clause 2 is the inclusion of a definition. This, apart from its usefulness in regard to buildings and structures generally, specifically provides for the inclusion of items like underground and overground tanks and oil refineries.

Section 16 of the existing Ordinance does not require property-owners to give notice to the Chief Assessor when rentals are increased. The amendment Bill will place the onus on the owner to inform the Chief Assessor of instances where rentals are increased. Such notice will also be required when renting vacant land.

The proposed amendment to section 17 is to empower the Chief Assessor to increase the annual value of properties taking account of the increases in land value in the recent years, especially in those cases where the annual value bears little relationship to the price at which the property changes hands. As the Ordinance now stands, the Chief Assessor may amend the annual valuation list during the year in which it is operative where there is an inaccuracy in a material particular. However, the Ordinance does not define what constitutes an inaccuracy in a material particular. An amendment will clarify the circumstances under which the Chief Assessor may amend the existing valuation list and spell out in detail the circumstances in which the annual valuation list may be amended. As any vendor or transferer of property remains liable to tax until notice is given, provision is being made under section 16 that he should give notice of transfer instead of the purchaser as provided for at present. Under the existing Ordinance, the maximum limit for fines imposed for failure to give notice of transfer of property is raised from $500 to $5,000. The present limit is considered inadequate to cover certain cases; for example where the transfer of property with a low annual value is not notified over a long period and a permanent savings from additional tax may well exceed $500.

Other amendments are either consequential, necessitated by separation from Malaysia, and they take account of Singapore's position as a sovereign independent Republic, or are matters of terminology or procedure to improve the administration of the law.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. -[Mr Lim Kim San].

Bill considered in Committee; reported without amendment; read a Third time and passed.