PROPERTY TAX (AMENDMENT) BILL

Order for Second Reading read.

The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Property Tax (Amendment) Bill 1996 seeks to amend the Property Tax Act to provide for the following:

i) To allow the Valuation List to be prepared and kept in such medium and authenticated in the manner as determined by the Chief Assessor;

ii) To empower the Valuation Review Board (VRB) to award costs;

iii) To empower the Comptroller of Property Tax to appoint agents for the recovery of property tax;

iv) To provide for the payment of tax notwithstanding any objection to the notices issued by the Chief Assessor and the Comptroller;

v) To enhance the penalties of offences under the Act;

vi) To control building and estate names in addition to street names;

vii) To exclude GST from the calculation of annual value of properties; and

viii) To make other minor changes to facilitate the administration of the Act.

Electronic Valuation List

Currently, the Property Tax Act requires that a Valuation List be prepared and updated each year. This list is printed from the electronic database of the Inland Revenue Authority of Singapore (IRAS) to enable the public to determine the owner, address and Annual Value (AV) of any property in Singapore. The printed list is voluminous, comprising 99,000 pages in 335 volumes and requires substantial effort to update.

IRAS has since February 1992 implemented an Electronic Valuation List (EVL). The EVL uses the same database from which the printed list is obtained. The public can view the Valuation List from computer screens at the IRAS or from their own premises through Teleview. The Act therefore needs to be amended to make legal provisions for:

i) the validity of the EVL;

ii) public inspection of EVL through computer terminals;

iii) the authentication of EVL when updated; and

iv) the admissibility of any information extracted from the EVL in court as primary evidence. Clauses 4 and 5 of the Bill provide for this.

Valuation Review Board

The Valuation Review Board is established under the Property Tax Act to hear public appeals against property values or property tax. The Board is currently empowered to award costs incurred in processing such appeals up to a limit of $250 against appellants whose appeals are vexatious or frivolous. These powers are too restrictive. VRB should have the discretion to award such costs against a party other than the appellant, for reasons which could include unwarranted delay in responses, and for sums higher than $250.

Clause 12 amends the Act to give the VRB the discretion to award the costs of an appeal to any party or refer the case to the Supreme Court for the awarding of costs according to its prescribed scale. This is in line with powers accorded to the Income Tax Board of Review.

With regard to the tenure of the members of the VRB, clause 11 amends the Act to allow for flexible periods of appointment for VRB members instead of a fixed term of three years. This is similar to provisions in the Income Tax Act.

Appointment of Agents to Recover Property Tax

At present, the Comptroller of Property Tax has powers under the Property Tax Act to auction off properties to recover due tax. However, this is a drastic measure which preferably need not be taken. To facilitate the recovery of property tax, clause 13 empowers the Comptroller of Property Tax to appoint agents to retain money in bank accounts (whether individual or joint accounts), and proceeds of sale of any immovable property owned by one or more persons as joint owners, and to pay the tax due from such amount to the Comptroller. This provision is consistent with that in the Income Tax Act and the Goods and Services Tax Act.

Tax Payable Notwithstanding Objection Lodged

Currently, tax is not payable for properties which are included for the first time in the Valuation List if an objection has been lodged. Such properties include new properties and properties which are leased from the State for more than three years. To discourage frivolous objections which are lodged for the sole purpose of deferring property tax payment, clauses 8 and 10 amend the Act to allow for the collection of property tax payable, notwithstanding the fact that an objection has been lodged. This is in line with provisions in the Income Tax Act.

Enhancement of Penalties

The current fines in the Act have not been revised since the 1960s. Clauses 6, 7, 9, 17, 18, 19, 20 and 23 revise the fines to bring them closer to those imposed for similar offences in the Vandalism Act and the GST Act. Clause 20 also inserts a new section to make the provision of false information an offence. This is also provided for in other tax legislation.

Power to Regulate the Naming of Buildings and Estates

Currently, the Property Tax Act only controls the naming of streets and the numbering of houses. The control over the naming of buildings and estates is currently done administratively. Clause 15 amends the Act to authorise the Minister for Finance to approve the names of all buildings and estates. In relation to this, clause 16 provides for the imposition of penalties for non-compliance.

Exclusion of GST in the Computation of Annual Value

Clause 2 amends the Act to exclude GST from the calculation of annual value to ensure that owners are not unduly assessed for GST charged on the rental of the premises. The exclusion of GST from the value to be taxed is also provided for under the Stamp Duties Act, the Customs Act and the Betting and Sweepstake Duties Act.

Amendments made to facilitate the administration of the Act

Clause 3 amends the Act to provide for a specific date for the submission of claims for refund of unoccupied properties. Currently, owners claiming refund of property tax on their vacant properties are required to submit their claims on prescribed forms as soon as the vacancy period ends or not later than a month after each half year period. The processing of such vacancy claims is done on an ad hoc basis throughout the year. Clause 3 amends the Act to set a specific date, that is, 15th November each year, whereby claims for refund of tax on vacant properties are to be submitted. Such claims will cover a period of 12 months. This will give IRAS time to process the claims in the remaining one and a half months of the year. Property owners will be notified of the outcome of their claims in January of the next year.

Finally, clause 21 inserts a new section in the Act to allow summonses to be served by registered mail similar to that provided for in the Housing and Development Act, the Road Traffic Act, the Income Tax Act and the Companies Act. Clause 21 also specifies that documents will be served only to one owner in the case of a jointly owned property, but documents can be served to all parties in a joint ownership upon request.

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. - [Dr Richard Hu Tsu Tau].

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