TAX EXEMPTION FOR ANNUITY

Dr Lily Neo asked the Minister for Finance whether he will consider complete tax exemption for annuity to encourage people to be self-sufficient for old age.

The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Speaker, Sir, currently, our primary savings scheme is the CPF. Government has given generous tax treatment to the CPF system. Mandatory contributions to CPF and income earned from CPF funds are tax exempt. In line with this, the streams of income paid out from annuities bought with the CPF Minimum Sum are tax exempt.

An Inter-Ministerial Committee on Ageing Population is studying the adequacy of retirement provisions for Singaporeans in the light of a greying population. If tax benefits are useful to encourage people to build up their retirement savings and use them prudently when they retire, the Government would consider them. In particular, we will study whether to extend the current tax exemption for annuities bought with the Minimum Sum to annuities bought with CPF savings beyond the Minimum Sum.

Dr Lily Neo: Sir, may I ask the Minister what is the timeframe for his consideration?

Dr Richard Hu Tsu Tau: I cannot give a specific answer at the moment. It should probably be some time around the Budget.

Mr Jeyaretnam: May I ask the Minister whether he or the Health Ministry has taken note of the recent report by the Samaritans of Singapore, that the suicide rate among the elderly is much greater than in other groups? What does the Ministry or the Government propose to do about that?

Dr Richard Hu Tsu Tau: I do not see the relevance of this to the question posed by Dr Lily Neo. I suggest that the hon. Member submit a Question on this issue.

Mr Speaker: I agree with the Minister. I do not see the relevance.