NEW SINGAPORE SHARES AND ECONOMIC RESTRUCTURING SHARES (Confiscation by Inland Revenue Authority)

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NEW SINGAPORE SHARES AND ECONOMIC RESTRUCTURING SHARES:

(Confiscation by Inland Revenue Authority): 3.

Dr Chong Weng Chiew asked the Deputy Prime Minister and Minister for Finance how many persons had their New Singapore Shares (NSS) and Economic Restructuring Shares (ERS) confiscated by the Inland Revenue Authority of Singapore (IRAS) for not having paid their taxes.

The Deputy Prime Minister and Minister for Finance (Mr Lee Hsien Loong): Mr Speaker, Sir, the Inland Revenue Authority of Singapore (IRAS) does not confiscate the shares. The IRAS appoints the NSS and ERS Trusts as agents to recover the outstanding taxes when the taxpayer applies to exchange his NSS or ERS for cash. The IRAS is able to recover the outstanding tax only when the

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taxpayer exchanges his NSS/ERS for cash.

The IRAS started to recover outstanding taxes from NSS and ERS in April 2003. So far 26,500 taxpayers have been notified of the IRAS' intention to recover their outstanding taxes when they exchange their NSS or ERS for cash. Their outstanding taxes amount to about $76 million in total. Since only 150 of the taxpayers have exchanged their NSS or ERS for cash, IRAS has recovered so far just $71,000.

I would like to assure the House that the IRAS only recovers tax arrears from encashed NSS or ERS as a last resort when all previous attempts to get the taxpayer to pay his taxes have failed. These 26,500 taxpayers have defaulted on their taxes for more than 3 years and have failed to respond to IRAS' numerous reminders and other enforcement actions. IRAS informs the taxpayers of its intention beforehand so that none of the taxpayers should be taken by surprise.

Dr Chong Weng Chiew (Tanjong Pagar): Sir, if the aim of the ERS is to help cushion the impact of the GST hike, which is especially so for the low-income families, and with the understanding that many low-income families do have many other arrears, including utilities arrears, could the DPM reconsider the confiscation?

Mr Lee Hsien Loong: Mr Speaker, Sir, I have just explained that we are not confiscating the shares. But taxpaying is the duty of every citizen. In fact, it should be one of our Civics lessons in school. And if you are owing taxes for three years and repeated reminders, then I think before we hand out any hong baos, you should pay your taxes.

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