OWNER-OCCUPIED PROPERTIES (Revision in valuation)

Mr Ang Nam Piau asked the Minister for Finance what is the basis for a rise of as much as 250 per cent over the old annual value with the recent revaluation of owner-occupied property; and if he will give an assurance that concessions given by him to those affected house-owners will not be withdrawn.

Mr Tang See Chim (for the Minister for Finance): Mr Speaker, Sir, the recent revaluation exercise covered about 7,000 owner-occupied properties in addition to other properties whose values had not been revised for years. The revised values reflect current rental values for similar properties, the annual values of owner-occupied properties range between 25 per cent and 75 per cent of the true annual values.

The Property Tax Division collates and analyses information on rentals and values to derive the rental an unfurnished property would obtain on the market if rented. While for a majority of owner-occupied properties the annual values have been revised by 100 per cent to 150 per cent, there are instances where the annual values have been revised by 250 per cent. In such cases, it only goes to show the magnitude of under-assessment of annual values through failure to revise values over the years.

The International Monetary Fund Team which studied our taxation and revenue machinery last year has commented that property tax is the weakest component of Singapore's tax structure and a complete reorganisation of the department with additional staff is now taking place.

Although it is obvious that the status quo cannot be maintained for long, every consideration will be given to grant relief to owner-occupiers. For a start, it is proposed to bring relief to owner-occupiers by increasing the exempt net annual value from $3,000 to $6,000 for income tax purposes. This will ensure that a taxpayer living in his own house does not have to pay additional income tax, except for those who live in luxurious splendour in residences whose net annual value exceeds $6,000 per annum. A Bill will be introduced in Parliament to amend the income Tax Ordinance for increasing the exemption limit from $3,000 to $6,000 of the net annual value of owner-occupied houses.

Further, the revision in annual values will not result in any additional property tax liability for owner-occupiers.

Mr Ang Nam Piau (Thomson): (In Mandarin): Mr Speaker, Sir, the Parliamentary Secretary has not answered the second part of my question. I would like him to assure the House that the concessionary rate will not be withdrawn by the Government.

Mr Tang See Chim: Mr Speaker. Sir, I have said that the concessions will continue for as long as the economic situation warrants it. That is all the assurance I can give to this House.

The Government's policy on taxation was given to this House by my Minister during his Budget Statement on the 9th March, 1970. I can do no better than to quote him. In column 50l of the Hansard, he said:

'The Government's policy in recent years has been to depend on fast economic expansion and improved tax administration to provide increased revenue rather than raise rates of taxation to higher levels or introduce new taxes.'

It is therefore in the interest of everyone in this country, not less the property owners, to see that there is no let-up in the economic progress of our country.