INCOME TAX (AMENDMENT NO. 2) BILL

Order for Second Reading read. 5.00 pm

The Minister for Finance and Minister for Trade and Industry (Dr Tony Tan Keng Yam): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The purpose of this Income Tax (Amendment No. 2) Bill is to give legislative authority to the income tax concessions announced in the 1983 Budget Statement, Opportunity has also been taken to include two other amendments to the existing legislation.

It was announced in the 1983 Budget Statement that with effect from Year of Assessment 1984, the chargeable income of any author or composer would be not more than 10% of the gross royalties and other payments received from local publishers for the right to use the copyright in any literary, dramatic or artistic work. Any company wholly owned by such authors or composers would also be able to enjoy this concession. Clause 2 of the Bill provides for this.

Another Budget concession is the exemption from tax on income derived from syndicated offshore loans, where the syndication work is carried out in Singapore, for the next five years beginning 1st April 1983, and for such further period as the Minister may approve. Clauses 3 and 8 amend sections 13 and 43A of the Act to empower the Minister to make regulations to provide for this. Clause 4 amends section 13B of the Act to allow dividends declared from the exempt income of such syndicated offshore loans to be also exempt from tax in the hands of shareholders.

With effect from 1st April 1983, if the periods of use of private hire (SZ) cars by any company or business enterprise exceed in aggregate 183 days, the whole amount of the rentals and other expenses incurred will be disallowed for purposes of tax deduction. If the rental periods overlap, the overlapping periods will be counted once only for the purpose of determining the 183-day limit.

In order to make the amendment effective, it is now necessary to include the use of other SZ cars by his employees as an employer's own use in computing the 183day limit for the purpose of claiming expenses on the use of SZ cars. Similarly, the use of SZ cars by his employer or co-employees would be taken into account in determining the employee's claim for deductions on the use of such cars. These are provided in clause 5.

Clause 6 amends section 19A of the Act to provide for 100% depreciation allowance in the first year to be claimed on expenditure incurred on any computer or office automation equipment from Year of Assessment 1984. Residual allowance in respect of such equipment will also be available for full set-off.

With effect from Year of Assessment 1983, the earned income relief will be increased from $2,000 to $3,000 for persons above 55 but below 60 years of age and from $3,000 to $4,000 for persons aged 60 years and above. Clause 7 provides for this as well as to allow handicapped persons of 55 years and above to claim earned income relief of $2,000 by virtue of his handicap in addition to the earned income relief of $3,000 or $4,000, depending on his age.

The enhanced child relief for the specially qualified married woman is now the normal child relief plus 5% of the woman's annual earned income for each of her first three eligible children. Clause 9 amends the fifth Schedule to the Act to provide for this to take effect from Year of Assessment 1983.

I now move on to two other amendments to the existing legislation.

Clause 3 amends section 13 of the Act to extend the Minister's power to exempt from tax remittances of income from abroad to cover remittances from countries which have double taxation arrangements with Singapore. This will enable full tax exemption to be granted in those cases where the double taxation arrangement only provides for a reduced rate of tax.

The amendment to section 19A of the Act has been enlarged to enable the Minister to approve enhanced depreciation allowances for any balance of expenditure incurred on such equipment by a taxpayer, notwithstanding that he had previously claimed normal depreciation allowances in respect of that expenditure. These are provided in clause 6.

Mr Deputy Speaker, Sir, I beg to move.

Question proposed.

Mr Jeyaretnam: Mr Deputy Speaker, Sir, before I speak, perhaps I had better say that I benefit by this amendment to clause 7, being over 55. So having declared my interest, may I speak.

Mr Deputy Speaker, Sir, as the Minister has said, this Bill seeks to give legislative effect or authority to concessions made in the Budget for this year. What the Minister forgot to say was that these concessions were made purely to the rich. I do not want to repeat what I said in my Budget speech. There are two concessions here - enhancement of allowances for those who are 55 and those over 60 and also to the married women who are specially qualified persons.

Mr Deputy Speaker, as I tried to point out in my Budget speech, and as has been pointed out in letters after the Budget speech and the debates in this House, these two concessions are discriminatory. They favour the rich as against the poor. We have just been told this afternoon that those entering Class C wards will have to pay substantially higher charges. Whereas we are all too ready to impose charges on the poor for hospital care and treatment and for other services given to them because we say we cannot go on giving free services; the revenue cannot afford it or for whatever reasons. On the other hand, it would appear we are equally ready to hand back to those who do not need these concessions large sums of money. We have been told in the Budget that the loss to the revenue would be about $1.4 million in the concession given to married women who are specially qualified persons. I see now that this concession was probably brought in to prepare the way for the Prime Minister's appeal in the National Day Message to lure the specially qualified women who were not married yet to marry to get these concessions.

Mr Deputy Speaker, Sir, I say that these concessions that were made, I do not want to repeat, are thoroughly objectionable. They are discriminatory based on wealth. And I say it is a shame that this Government should continue to bring in concessions for the rich whilst loading the poor with higher fees and costs for services given to them. For those reasons, Mr Deputy Speaker, Sir, I shall oppose this Bill.

Dr Tony Tan Keng Yam: Mr Deputy Speaker, Sir, the purpose of this Bill is to give legislative authority to the concessions which have already been approved in the 1983 Budget Statement. The purpose of this debate today is not on those concessions itself. They have already been passed. I do not propose to waste Members' time by repeating the arguments again. If the Member for Anson is sincere in not wanting to repeat what he has said in the Budget Statement, he should not have stood up.

Question put, "That the Bill be now read a Second Time."

Mr Jeyaretnam: Division, Sir.

Mr Deputy Speaker: Again? This was fully debated at the last Budget session.

Mr Jeyaretnam: It is to give legislative effect now.

Mr Deputy Speaker: Well, so be it, if you so prefer to waste the time of the House. Ring the Division bells.

The House divided: Ayes, 40; No, 1; Abstention, 1. Ayes No Abbas Abu Amin Jeyaretnam, J.B. Ahmad Mattar Ang Kok Peng Barker, E.W. Chandra Das, S. Cheong Yuen Chee, Eric Ch'ng Jit Koon Chor Yeok Eng Fong Sip Chee Goh Chee Wee Goh Chok Tong Ho Kah Leong Ho See Beng Abstention Howe Yoon Chong Jabbar, M.K.A. Hwang Soo Jin Jayakumar, S. Koh Lip Lin Lau Teik Soon Lee Yock Suan Liew Kok Pun Lim Boon Heng Lim Chee Onn Othman bin Haron Eusofe Phua Bah Lee Rohan bin Kamis Saidi Haji Shariff Seah Mui Kok Sia Kah Hui Sia Khoon Seong Sidek bin Saniff Tan Keng Yam, Tony Tan Soo Khoon Tay Eng Soon Teh Cheang Wan Teo Chong Tee Wan Soon Bee Yap Giau Cheng, Eugene Yeo Choo Kok Yeo Ning Hong Yeo Toon Chia

Question accordingly 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. - [Dr Tony Tan Keng Yam].

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

Mr Deputy Speaker: I propose that we take a break now. I suspend this Sitting and will take the Chair again at 5.50 p.m.

Sitting accordingly suspended at 5.22 p.m. until 5.50 p.m. Sitting resumed at 5.50 p.m.