STATUTORY BOARDS (TAXABLE SERVICES) BILL

Order for Second Reading read.

2.55 p.m.

The Parliamentary Secretary to the Minister for Finance (Mr Tang See Chim) (for the Minister for Finance): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, before I deal with the Bill which covers two of the four new taxes announced by the Minister for Finance in his Budget Speech, I would like to say that the response of the public to the additional tax measures is heartening. These tax measures have been described as mild and fair because the new taxation has been kept to the minimum and the additional burden is spread thinly over a large number of persons who are able to pay without being over burdened.

Some Members have expressed fears that the levy on Public Utilities Board bills will cause hardship to the poor households. In fact, the levy is based on the ability to pay and the burden on the lower income group is minimal. This has been achieved by avoiding any additional tax on cheaper cooking fuels and by exempting households whose P.U.B. bills do not exceed $10 a month. There is a rough relationship between the amount of the P.U.B. bill and the economic status of the household. The very poor are not on the P.U.B. billing list or have bills between $1 and $5. Such households use only little electricity for lighting and consume little water. The next group with P.U.B. bills between $6 and $10 consumes more electricity and water. There are some 58,000 households, or roughly 25 per cent, whose monthly P.U.B. bills are less than $10. These people do not have to pay tax on their bills. As the income rises, households purchase refrigerators, radios, television sets and install fans, water-heaters and air-conditioners. The average monthly cost of power for each of these appliances is as follows: Average Article cost of power per month Fan $3 to $4 Refrigerator $3 to $4 Television $3 to $4 Water-heater $5 to $6 Air-conditioner (one horse-power unit) $27 to $30

It is also possible to isolate the really poor households y the type of cooking fuel used, suhc as kerosene, charcoal and wood. Sir, may I rfer to teh Singapore Sample Household Survey, 1966, which was conducted by the Ministry of National Development and the Economic Research Centre, University of Singapore? It is entitled Singapore Sample Household Survey, 1966, No 1, and printed by the Government Printer in September 1967. The table I refer to, Sir, is H.54 at page 234 of the Report. According to this survey, of the total 331,952 households; kerosene was used by 104,399 households; charcoal was used by 32,675 households; and wood was used by 58,231 households; collectively accounting for 59 per cent of the households. There are about 73,000 P.U.B. consumers whose monthly bills range from $10 to $20. They will be liable to pay a levy of five per cent. Nearly half of these households will have to pay between 50 cents and 70 cents per month and the other half will have to pay between 75 cents and $1 more per month. The small levy will not cause any hardship as these households are in the better financial position, or otherwise they would not be in a position to have fans, radios and refrigerators.

The next category of households, numbering 32,000, have P.U.B. bills of between $21 and $30. They will be required to pay a levy of 10 per cent. These households will have to pay between $2 an $3 a month. Such households will normally have fans, television sets and refrigerators and the extra $2 to $3 a month is not likely to involve any sacrifice on their part.

There are about 50,000 households with P.U.B. bills above $30. These households are the more affluent and they have refrigerators, television sets, water-heaters and even air-conditioners. These households also have two or three water closets. I am sure that these people can afford to pay a levy varying from $3 to $12 per month. Members will agree that the tax which rises from a few cents to a few dollars in line with the economic status of the households is not unreasonable.

The levy on Singapore Telephone Board - for short, I shall just say S.T.B. - bills will only affect people with means, as the less well-to-do are unlikely to have a telephone. There are 45,104 residential lines and 35,552 business lines for our population of two million people. This is the first time for more than a decade that telephone subscribers will have to pay an additional amount, as the telephone charges have not been revised since 1958. Resisdential subscribers who do not make trunk calls frequently will, on the average, pay about $3.50 per line per month. I am sure the amount of tax is far from being exorbitant and can be borne easily.

Although new administrative machinery is not requried for the collection of taxes on P.U.B. and S.T.B. bills, it is necessary to provide by enactment of this Bill, legal authority for the imposition and collection of these taxes. The definition of "services" and "taxable services" in clause 2 of the Bill includes letting of apparatus or appliances.

Clause 3 of the Bill empowers the Minister to specify by publishing an order in the Gazette the statutory boards and the services which will become taxable as well as the rates of tax to be charged.

Clause 4 gives the power to the statutory board for the collection and recovery of this tax in such manner as approved by the Minister.

Clause 5 stipulates that the tax collected under this Bill shall be paid into the Consolidated Fund.

Clause 6 gives the power to the Minister to exempt any person from the payment of this tax. Under this provision, the Minister for Finance intends to exempt subscribers of the P.U.B, whose bills are below $10 per month and industrial consumers of electricity using more than 400,000 units of electricity a month.

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 Tang See Chim].

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