CUSTOMS (AMENDMENT) BILL

Order for Second Reading read.

The Second Minister for Finance (Mr Lim Hng Kiang): Mr Speaker, Sir, on behalf of the Deputy Prime Minister and Minister for Finance, I beg to move, "That the Bill be now read a Second time."

The Bill will amend the Customs Act:

(a) to change the basis of valuation for goods levied with ad valorem excise duties;

(b) to allow the Minister to be able to grant remission of duties, taxes, fees or other charges payable;

(c) to empower the Director-General of Customs in certain operational matters;

(d) to remove provisions that are operational and administrative in nature from the Customs Act;

(e) to streamline and clarify provisions in the Customs Act;

(f) to remove provisions that are obsolete due to changes in policies and operational procedures; and

(g) to make consequential changes as a result of the formation of Singapore Customs.

I shall now elaborate on the main amendments in the Bill.

Change in Basis of Valuation for Motor Vehicles

Currently, the basis of valuation used for the purpose of determining the excise duty for motor vehicles is the Brussels Definition of Value. Clause 8 of the Bill amends section 22 of the Customs Act to change the basis of valuation to the Customs Valuation Code, or CVC. The CVC is an internationally adopted basis of valuation, increasingly used by many countries.

The new basis will exclude obligatory expenses such as advertising, promotion, warranties, showroom and warehousing costs. This move will result in a lower value for most motor vehicles, and hence lower the excise duties and Additional Registration Fees collected on these vehicles.

Allowing Minister to Grant Remission

Currently, the Minister can only grant exemption and refund of duties, taxes, fees and other charges paid or payable by a person. Clause 6 of the Bill amends section 13 to allow the Minister to be able to also grant a remission of duties, taxes, fees or other charges payable. A similar provision is also found in other pieces of tax legislation, for example, the Income Tax Act and the Goods and Services Tax Act.

Empowerment of Director-General of Customs

The Bill also amends the Act to empower the Director-General of Customs in several operational matters so as to give Singapore Customs more operational flexibility. This will in turn improve administrative efficiency. For example, clause 5 of the Bill inserts a new section 11, which allows the Director-General of Customs to waive the payment, or recovery of payment, of any duty, tax, fee or other charge, where the amount does not exceed $20.

Removal of Operational/Administrative Requirements from Customs Act

The Bill streamlines the Act by removing provisions that are operational and administrative in nature. These provisions will instead be part of the subsidiary legislation relating to the Customs Act, so that operational and administrative rules can be changed quickly in line with the rapidly changing environment. For example, clause 9 of the Bill amends section 34 of the Act, which specifies the types and amount of dutiable goods that travellers can bring into Singapore without permits. By not specifying such detailed quantitative limits in the Act itself, adjustments can be made more quickly when necessary.

Streamlining and Clarification of Provisions

The Customs Act will be amended to streamline some provisions and to clarify several other provisions. For example, clause 16 of the Bill amends section 93 of the Act to clearly describe the situations where travellers are required to declare the goods at the checkpoints.

Removal of Obsolete Sections

The Bill amends the Act to remove sections that are obsolete due to changes in policies and operational procedures. One example of an obsolete section is section 35 which requires hard-copy permits not used to be returned to CED within 24 hours or as soon as CED's office is open. Clause 10 of the Bill repeals this section since hard-copy permits are no longer used today. Permits are declared and approved electronically. They will be automatically invalidated upon expiry.

Formation of Singapore Customs

Clauses 2 and 24 of the Bill will give legislative effect to consequential changes to sections 3(1), 98 and 138 of the Customs Act needed as a result of the formation of Singapore Customs on 1st April 2003. Clause 26 of the Bill amends other pieces of legislation, like the Income Tax Act and the Immigration Act, which are needed as a result of the formation of Singapore Customs.

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. - [Mr Lim Hng Kiang].

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