OTHER TAX CHANGES

Stamp Duty for Property Transactions

At present, all property transactions except stocks and marketable securities are chargeable to stamp duty at the rates of 2% for the first $30,000, 2.5% for the next $20,000 and 3% for amounts exceeding $50,000. To reduce the cost of buying and selling HDB properties and to facilitate upgrading and relocation, I have decided to lower the stamp duty on property transactions (except stocks and marketable securities) to 1% for all properties up to $90,000, 2% for the next $60,000 and leave the rate unchanged at 3% for all incremental values above $150,000. The revised structure will take effect from 1st April 1989. This measure will cost the Government about $44 million per year in revenue.

Duty on Tobacco and Cigarettes

Duties on cigarettes were raised last year as part of the national effort to discourage smoking. In line with this continuing effort, I propose therefore to increase the import duty on cigarettes by $10 per kilogram to $85 per kilogram. The import duty on tobacco and excise duty on cigarettes will also be increased to $42 and $40 per kilogram respectively. With your permission, Sir, I would like to table Appendix I (Cols. 43 - 46) showing the details of the increases. These increases will take effect from today. (Copies of document distributed to hon. Members). Appendix I - DUTIES ON CIGARETTES AND TOBACCO (Cols. 43 - 46)

Taxes on Public Utilities and Telephone Services

The suspension of the tax on electricity and gas is due to expire on 31st March 1989. At present, a 10% tax on water charges in excess of $20 per month remain in force. I have decided to replace this from 1st April 1989 with a 5% tax on the combined PUB charges for water, gas and electricity consumed by domestic users in excess of $40 per month. There will be no tax in the case of non- domestic users. With this change, domestic consumers will pay additional taxes of $7 million per year.

Similarly, the suspension of the 20% tax on domestic telephone services and trunk call services to West Malaysia is due to expire on 31st March 1989. I have decided to restore from 1st April 1989 a 5% tax on these services for residential subscribers. The suspension will, however, remain for the business subscribers. It is expected to bring in revenue of about $8 million a year.