Chee Hong Tat
Singapore
“The National Parks Board (NParks) resumed crow shooting operations in March 2026 across nine districts, including Yishun. These sites were prioritised based on several factors, including the volume and severity of public feedback on crow-related issues, as well as the technical feasibility of conducting shooting operations safely at each…”
“To drive sustainable construction and reduce reliance on conventional diesel generators, the Housing and Development Board (HDB) has required the use of battery energy storage systems (BESS) or synchronised generator set systems at Build-to-Order construction worksites for all building tenders called since February 2025.”
“The Housing and Development Board (HDB) tracks resident feedback on maintenance-related issues, including spalling concrete and structural cracks within HDB flats. Such issues are much less common in younger flats, compared to older flats above 30 years old.”
“The Building and Construction Authority (BCA) provides resources on its website to guide building owners and Management Corporations Strata Title (MCSTs) on lift modernisation.”
“Private retail developments sold through the Government Land Sales Programme are intended to complement the commercial offerings in public developments undertaken by agencies, such as the Housing and Development Board.”
“The National Parks Board (NParks) is reviewing both the Animals and Birds Act and the Code of Animal Welfare (COAW). The former will include pet sector businesses and the latter will include and start with pet groomers.”
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“Over the past 10 years, there were, on average, about 44,000 new private cars registered a year, 3,000 company cars, 8,000 private-hire cars and 2,000 cars categorised as "others" which include among others, off-peak and tax-exempt cars. The Member may wish to visit the Land Transport Authority's website for further quarterly refreshes of this set of data.”
“It is an offence to sell a non-compliant power-assisted bicycle (PAB), whether new or second-hand. It is also an offence to alter a PAB to render it non-compliant. The Land Transport Authority (LTA) conducts enforcement operations against errant users and retailers. Non-compliant devices are seized by LTA and enforcement actions are taken against users or retailers found to have contravened the law. Members of the public are advised to exercise caution and only purchase compliant devices for use on paths and roads. Buyers should also ensure that the registration of the PAB is transferred to their name during the purchase. LTA will continue with its public education outreach and enforcement efforts with support from key stakeholders.”
“PSA Singapore and Jurong Port aim to achieve 60% reduction of total emissions from port operations by 2030 compared to 2005 levels, and net-zero emissions by 2050. Both operators have made progress and are working towards their 2050 net-zero target, while maintaining port competitiveness. For example, PSA Singapore will grow its fleet of electrified vehicles, such as Automated Guided Vehicles. Such vehicles not only increase the efficiency of port operations through automation, they also produce lower carbon emissions compared to diesel vehicles. Jurong Port's future Steel Port-Centric Ecosystem beyond 2030 will bring steel storage and fabrication nearer to Jurong Port, which will improve operational efficiency and competitiveness as it reduces the need for truck trips between separate plants. Jurong Port is also assessing the feasibility of electrifying its gasoline-powered vehicles and reducing its fleet of diesel forklifts through resource optimisation.”
“So, I encourage businesses to learn more about the EIS through the information available on the IRAS website and we will also work with industry partners such as our trade associations and chambers to raise awareness among businesses. Mr Speaker, I beg to move. 7.39 pm”
“We recognise the importance of training workers to support a business' capability to innovate. Hence, the EIS introduces enhanced tax deductions for around 10,000 SkillsFuture Singapore-subsidised courses. These courses support industry transformation and workforce development needs and will support a range of enterprises from different industries at various stages of their innovation journey. They also include courses that cater to freelancers from the creative industries. SkillsFuture Singapore will continue to monitor the relevance and effectiveness of courses eligible for EIS deductions and refine the list of courses accordingly. Mr Sharael asked if the Government could request proof of value before the tax deduction on training is granted and if the deduction can be limited to employees who have served a minimum number of years to minimise abuse of the scheme. Even with the 400% tax deduction, a firm will need to co-pay for training. This will help to ensure that the firm sends its employees for training only if it will create value for the firm and support its innovation efforts. The firm, the employer has skin in the game. The $400,000 training expenditure cap for tax deductions will further mitigate the risk of abuse. The Government will monitor the take up of the EIS, businesses' investments in R&D and innovation as well as feedback on the scheme, and these will allow us to continually review the scheme's effectiveness and we will refine it along the way. Ultimately, what we want is to have a scheme that can support companies to embark on innovation because we know innovation is key to future economic growth, it is key to creating good jobs for our workers.”
“Businesses that undertake research that meets the R&D definition can tap on the enhanced deductions for their higher R&D costs, which has a higher expenditure cap of $400,000. Many of the projects undertaken in partnership with the universities would be able to qualify for the enhanced R&D or IP-related deductions. Nonetheless, we will observe the uptake of this new deduction for innovation and consider whether we could expand the list of partner institutions where appropriate. I also thank Ms See for highlighting the cashflow concerns of businesses when they undertake innovation activities. We will monitor and study how we can further support our businesses in their innovation journey, including encouraging them to work with NTUC to form company training committees. Ms See suggested providing some upfront subsidy for innovation, similar to what we are doing for training courses. But the context between innovation and training is quite different. Unlike training courses, which can be pre-approved and subsidised upfront, investments in innovation are varied, differing by sector, scope and the businesses' level of maturity. It is therefore difficult to pre-approve innovation expenditures or provide upfront subsidy. Beyond Government support schemes like EIS, it is important for businesses to take the initiative and embark on the innovation journey to improve their competitiveness. They have to set aside adequate cashflow for investing in new equipment and developing the necessary capabilities. Mr Wee and Ms Nadia asked about the development of human capital to support businesses' innovation activities. Mr Sharael also asked if the list of eligible courses should be narrowed down.”
“6 billion between 2010 and 2020, which points to businesses' underlying desire to innovate. During the same period, we also saw almost a three-fold increase in sales revenue from commercialised products attributed to R&D performed in Singapore. These are promising trends, but we know there is room for our economy and enterprises to invest even more in R&D so that we can be more globally competitive. The EIS, together with our broader ecosystem of grants, incentives, financing tools and R&D talent, will give businesses an additional boost. Mr Yip, Mr Wee and Mr Huang highlighted the importance of encouraging our local SMEs to take advantage of the EIS to innovate. While SMEs have shown promising growth in R&D expenditure, we recognise that many SMEs are less likely to have the scale to undertake R&D on their own. This is why we are introducing a new tax deduction for expenditure incurred on innovation projects, which SMEs more commonly undertake, rather than R&D. The tax deduction will apply for qualifying innovation projects carried out with partner institutions such as the polytechnics, ITE and the Centres of Innovation, and could relate to business process redesign or deployment of productivity equipment. These would not be considered "R&D" in the strictest sense, but are nonetheless useful to help SMEs to kickstart their innovation journey. Undertaking innovation projects with these partner institutions will also enable SMEs to tap on the existing expertise there instead of having to acquire or develop their own. Mr Yip asked if the expenditure cap of $50,000 can be revised upwards to cover higher-end research with higher costs. Sir, allow me to clarify that these innovation projects will not typically exceed the $50,000 cap.”
“I am glad that Members agree that philanthropy makes our society better and, given their different views between overseas and local giving, that they appreciate that the Government needs to strike a balance between the two. Beyond the PTIS, the Government has other tax incentive schemes to encourage local philanthropy. For instance, qualifying local donations made to IPCs and other eligible institutions enjoy a 250% tax deduction until 31 December 2026, which is higher than the tax deduction for overseas donations. The Government will continue to review our schemes to foster and sustain the spirit of giving. Finally, many Members have expressed support and interest in the EIS announced in Budget 2023. I thank them for their support. Mr Saktiandi asked about the rationale behind raising R&D tax deductions to 400%. The parameters of the EIS are set to provide modest but meaningful support for businesses in their drive to invest in R&D. Looking across comparable economies which offer similar tax deductions on R&D activities, a 400% tax deduction is competitive when compared to jurisdictions, such as Hong Kong and Malaysia. Mr Saktiandi, Mr Sharael and Ms Nadia asked about the effectiveness of tax deductions on innovation and its outcomes. R&D tax measures do lead to an increase in innovation activities as they help to mitigate risks and give an additional boost to returns on investments. That said, tax deductions cannot operate in isolation and must also be complemented by a developed R&D ecosystem to promote innovation, which the Government continues to invest in through our Research, Innovation and Enterprise plans. In Singapore, we have seen a promising increase in business expenditure on R&D over the years, from $3.8 billion to $6.”
“Second, to ensure oversight as highlighted by Ms Mariam, MAS requires all participating SFOs, to submit annual review returns. In addition, as SFOs are required to channel their donations through local qualifying intermediaries, these intermediaries also conduct due diligence checks. Third, to benefit from the PTIS, SFOs would have to meet two conditions: first, appoint and maintain a Philanthropy Professional at the point of application and throughout the incentive approval period; and second, incur an additional $200,000 in Local Business Spending and employ an additional local professional headcount in the financial year when the overseas donations are made. These conditions that Ms Chandradas asked about are made known upfront to the SFO applicants and they are required to declare that they have met the conditions in their annual returns to MAS. If the conditions are not met, the legislation provides for the Government to claw back the previously granted tax deductions. Fourth, Members spoke about ensuring that the local charity sector is not excluded from the benefits of PTIS. Indeed, it is not. By requiring that overseas donations take place through qualifying local intermediaries and requiring that SFOs have to appoint and maintain a philanthropy professional, the PTIS serves to uplift philanthropic capabilities within the charity sector in Singapore. Qualifying local intermediaries would include IPCs with a valid permit for "Fundraising for Foreign Charitable Purposes". Overall, some Members advocated for more overseas philanthropic giving across a wider spectrum of society, while others spoke about the need to ensure that the philanthropic giving also supports local causes.”
“This is why we have substantially enhanced the Assurance Package over the past two years, and the Government has also announced additional support measures to help families with rising costs of living beyond the GST increase. The Assurance Package was most recently enhanced to now a total amount over $10 billion with the Cost-of-Living package announced by the Deputy Prime Minister last week. There is some additional relief for all Singaporeans, with more for lower- and middle-income groups. Sir, Budget 2023 is an expansionary budget. It is less expansionary than the previous years' Budget and this is to avoid adding to elevated inflationary pressures while supporting our economy and helping families in a more uncertain global environment. We achieve this balanced outcome by focusing more of our support measures on the lower- and middle-income groups while providing some help for all Singaporeans. Mr Speaker, several Members – Mr Don Wee, Ms Usha Chandradas, Mr Shawn Huang, Mr Keith Chua, Mr Louis Ng, Ms Nadia Samdin and Ms Mariam Jaafar – expressed support for and sought clarifications on the PTIS. Allow me to share more about the scheme, and in doing so, address their questions. First, under the PTIS, approved qualifying donors can claim 100% tax deductions for overseas donations made through qualifying local intermediaries. Overseas donations refer to cash donations made towards any charitable, benevolent or philanthropic purpose whose main objective is to benefit persons, events or objects outside of Singapore. These could include overseas philanthropic causes in sustainability that Mr Wee mentioned, as long as all the other criteria are met. MAS is committed to processing applications to be approved qualifying donors and local intermediaries in a timely manner.”
“Deferring the GST increase will only store up more problems for the future, leaving us with less resources to take care of our growing fiscal needs and we cannot count on short-term upsides to fund structural needs. When the Government has unexpected fiscal upsides, we share these surpluses with Singaporeans, including providing relief for households through Cost-of-Living Support Packages. Mr Sharael mentioned this in his speech earlier. I will just name two components, for information. Deputy Prime Minister Lawrence Wong recently announced a $1.1 billion support package, and one of these items would be an increase in the CDC vouchers that all Singaporean households will receive in January next year. So, from $300 it has increased to $500 – $250 for supermarkets and $250 for heartland shops. And we will also increase the special payments that eligible Singaporeans will receive, and there will be 2.5 million eligible Singaporeans by the end of the year. So, there will be an amount, depending on your income, but up to $800 per eligible Singaporean. And this will include many of our Singaporeans, including our retirees who are staying in private properties because this does not look at your property type. It looks at your income, as long as you do not own two or more properties. So, we understand that Singaporeans are concerned about the GST increase and cost of living. On delaying the GST increase for one or two years, what we have done is actually better than that. With the Assurance Package, we have delayed the impact of GST increase for the majority of Singaporean households by five years and by about 10 years for lower-income households. The Government remains committed to doing so even with elevated inflation.”
“This concessionary levy directly benefits all families who need help with caring for their dependants, including those who do not pay income tax. Therefore, the FDWLR will be lapsed with effect from YA2025. Mr Speaker, Mr Louis Chua asked about the GST and whether it is possible to defer the 1% increase in 2024. Sir, the proposed change and timing of our GST rate increase has been robustly debated in this House but allow me to reiterate a few key points. We consider not just the year-to-year changes, or more importantly, the medium-term trend in our expenditures and revenues where we manage our fiscal resources. As we know, Singapore has an ageing population and we must expect that with an ageing population, there will be rising healthcare costs. Government expenditure is expected to increase from the current 18% of GDP to potentially over 20% of GDP by FY2030. This has yet to account for additional spending that may arise from new policy initiatives, including the need to further invest in resilience and to strengthen our social compact and economic competitiveness. On the revenue side, our tax revenue collections have grown broadly in line with GDP. The higher tax revenue collection in FY2022 compared to the previous year is due to our economic recovery after the COVID-19 pandemic. It is unclear whether the trend can continue, given the uncertain global macroeconomic outlook. In the medium term, revenue generally does not grow faster than GDP without tax rate changes. This is why the revenue measures announced at the recent Budgets, including the GST increase this year and next year, remain necessary to meet our medium-term spending needs.”
“It is part of a package of moves to support marriage and parenthood, which has been strengthened over the years. For example, we announced at Budget this year that we will be enhancing the Baby Bonus Scheme and parental leave provisions, which benefit all couples regardless of income. The change in WMCR will be effected prospectively and apply only to working mothers with qualifying Singapore Citizen children born or adopted on or after 1 January 2024. Eligible working mothers of qualifying children born or adopted before 1 January 2024 will not be affected as they can continue to claim the WMCR based on the existing design. As pointed out by Mr Sharael, the change in the WMCR reflects our social compact of a fairer society, one which we provide more support for the less well-off and, in this case, lower- and middle-income working mothers. We will continue to engage couples and parents to raise awareness of the package of support measures available for marriage and parenthood, including the enhancements announced during Budget 2023. Mr Saktiandi also sought clarification on the rationale for removing Foreign Domestic Worker Levy Relief (FDWLR). The FDWLR was introduced in 1989 to support working married women who needed the help of a domestic worker, so that they could return to the workforce. Since then, the Government has introduced new schemes to directly support those caring for dependants, including working mothers. In particular, those living with children below 16 years old, elderly or persons with disabilities may enjoy a concessionary Foreign Domestic Worker (FDW) levy of $60 per month instead of the usual levy of $300 or $450 per month for the first and subsequent FDW respectively.”
“The current FEDRs strike a balance between simplifying tax compliance while ensuring that the ratios are reflective of the actual expense ratios of delivery workers. Let me reiterate, Sir, that the FEDRs are optional. For those whose actual expenses exceed the FEDRs, they can claim deductions based on the actual deductible expenses incurred. Ms See and Ms Mariam asked whether IRAS intends to review the different FEDRs in the future to keep pace with changes in the costs of the delivery services and if the initiative on mandatory income submission by intermediaries could assist in this review. IRAS will regularly review and assess the relevance of the FEDR rates based on available data, including income information obtained from intermediaries. For example, IRAS reviewed the existing 60% FEDR for private-hire car and taxi drivers, which was implemented in the YA2019; they did the review this year. The latest data showed that while drivers' expenses have increased, their revenue has also grown due to increases in meter and mileage rates. Therefore, the 60% FEDR remains relevant and sufficient for the majority of drivers. For those that this does not apply to because their expenses are higher, as I mentioned earlier, FEDR is optional; they can submit the actual expenses. Mr Speaker, Members were concerned that the change in the WMCR will disincentivise higher-income mothers from having more children. Mr Yip and Mr Saktiandi asked if the Government has taken measures to address these concerns and if we had considered alternatives in designing or redesigning the WMCR. Sir, this issue has been thoroughly discussed and debated at Budget this year. As Deputy Prime Minister Wong had explained then, the WMCR change should not be seen in isolation.”
“Mr Yip Hon Weng enquired on how the Government will ensure that the intermediaries comply with the requirement and the accuracy of the information obtained as well as whether penalties will be imposed in the event of non-compliance and if there will be whistle-blowing policies in place. Sir, IRAS will issue a one-time notice to inform intermediaries of the requirement to maintain the requisite information as well as a yearly notice to inform them to submit information to IRAS. To ensure compliance, IRAS will adopt an approach similar to that for the Auto-Inclusion Scheme for employers. During the initial phase, IRAS will continue to render support to the intermediaries while adopting a light-touch approach such as issuing reminders or warning letters for non-compliance. Subsequently, actions such as composition or prosecution, which include penalties of up to $5,000, could be imposed for non-compliance. IRAS also has compliance programmes in place to detect and identify intermediaries who have made errors in the submission. This includes assurance audits to ensure that intermediaries have adequate controls to maintain accurate information. While intermediaries will not be unduly penalised for unintended errors or mistakes detected, they may be liable for offences if errors are due to negligence or without reasonable excuse. IRAS also has an existing whistle-blowing channel which the public can use to inform IRAS of any wrongdoing. Mr Speaker, Ms See asked whether the data used to determine the FEDRs accurately reflect the expenses incurred by delivery workers. The FEDRs were developed using income and expense data for the different delivery modes, which IRAS obtained from its consultation with the industry and survey with the workers.”
“He could have qualified for Workfare, but is not receiving it because he did not file his income tax returns and he did not make MediSave contributions. If the intermediary had submitted his income information to IRAS, he would have automatically qualified for $2,400 of Workfare in 2023. Tapping on intermediaries to submit income information on SEPs could also facilitate the administration of new schemes going forward, including financial assistance during a crisis. For instance, during the COVID-19 pandemic, the SEP Income Relief Scheme was rolled out to support SEPs. However, as SEP income information was incomplete, the Government was only able to automatically disburse the payouts to some SEPs, and NTUC had to process applications from SEPs who did not automatically qualify. Having the relevant data to quickly administer such support schemes will enable SEPs to receive the support more quickly, and also simplify administration of these schemes. Mr Wee, Mr Saktiandi and Mr Parekh asked about the extension of this initiative to other intermediaries and whether the intermediaries would be provided with financial support to establish new infrastructure for regulatory reporting. IRAS will adopt a phased implementation approach, starting with commission-paying agencies in YA2024, as many of these agencies are already submitting income information to IRAS. For intermediaries in other industries, such as ride hail service and taxi operators, food and goods delivery platform companies, IRAS will continue to engage them and work with them closely to understand and address potential operational and system issues, so as to keep the compliance burden low.”
“Second, the proposed amendment will not cover foreign entities that have no operations in Singapore other than the use of banking facilities here. IRAS will include these clarifications in their guidance. Overall, we do not expect the new tax treatment to have a negative impact on our economy, as our focus has always been on attracting and anchoring real economic activities in Singapore. Our global competitiveness will not be affected, as these international standards are also applied in other jurisdictions, so there is a level-playing field. Sir, let me now touch on the obligations on intermediaries for SEPs. Mr Saktiandi Supaat sought clarification on whether SEPs can opt out of having their income information submitted to IRAS by their intermediaries. Ms Jean See asked how such income information would be used and safeguarded. Intermediaries included in this initiative will need to submit income information of the SEPs whom they have made contracts with and these SEPs cannot opt out of having their income information submitted to IRAS. The use of such income information is governed and subject to existing safeguards under the Income Tax Act. The information obtained would be used for tax administration purposes, including pre-filling of income tax returns. This will make it more convenient for SEPs to submit their tax filings. They will be able to verify and amend the pre-filled income amount before filing their tax returns. Beyond tax, the income information collected will also help in the administration of social schemes, such as the WIS scheme, which I mentioned in my opening speech and Ms Mariam Jaafar spoke about this. Picture a 45-year-old SEP earning $1,500 a month.”
“On the other hand, this proposed amendment aims to address tax avoidance risks associated with foreign-sourced disposal gains and is not confined to large MNEs. Ms Chandradas and Ms Nadia also asked how IRAS would assess economic substance and operationalise the proposed change, while Mr Wee raised some scenarios relating to restructuring transactions, funds and family offices. The answer is that the tax treatment will depend on the facts of each case. As business practices vary across industries, it would not be possible to prescribe quantitative tests. Nevertheless, IRAS will certainly take sector-specific circumstances into account in administering the new rule. MOF and IRAS have held several engagements with the industry over the last few months to hear businesses' feedback and understand their concerns, as IRAS works out the implementation details. IRAS will provide industry with guidance on how economic substance will be assessed to be adequate. Where possible, sector-specific circumstances and common scenarios, including those raised by Members of the House, will be considered and addressed in the guidance. I would like to assure Members that we will implement the new tax treatment carefully, to minimise the impact on genuine businesses while deterring tax avoidance by entities without real economic activities in Singapore. IRAS aims to publish the guidance by the end of this year and will refine it over time based on feedback and consultation with industry partners. IRAS will consider the suggestion from Ms Chandradas for an expedited advance ruling framework. Let me also address two technical queries raised by Members. First, foreign tax credit will be available based on current tax rules.”
“Mr Speaker, I thank Members for their support for the Bill, and their comments and suggestions. Let me respond to the points they raised. Mr Don Wee, Ms Nadia Samdin, Mr Neil Parekh Nimil Rajnikant and Ms Usha Chandradas spoke on the proposed new tax treatment on foreign-sourced disposal gains. Let me reiterate that the proposed new tax treatment does not represent a shift in our broader tax policy on capital gains. It is not the intent of the proposed amendments in this Bill to tax capital gains in Singapore. Instead, the objective of this amendment is to address international tax avoidance risk by entities without real economic activities in Singapore, as well as that relating to foreign-sourced gains from the disposal of IP rights. For the latter, we will adopt the internationally-agreed modified nexus approach, which is also currently used for our Intellectual Property Development Incentive. As we have designed this proposed change to be as targeted as possible, there should not be significant impact on genuine businesses with real activities here. This move should be seen in the context of our broader policy to align key areas of our tax regime with international standards, such as the rules against harmful tax practices agreed by the Inclusive Framework on BEPS, as well as the EU COCG Guidance. As a small open economy, it is in our interest for our tax rules to stand up to international scrutiny, to facilitate the continued flow of trade and investments. Ms Chandradas asked about the interaction between the proposed amendment and BEPS Pillar 2 rules. Sir, they are not related and have different objectives. Pillar 2 Global Anti-Base Erosion Rules seeks to impose a minimum effective tax rate of 15% on large MNEs wherever they operate.”
“Since YA 2019, IRAS has provided an option for some groups of SEPs to apply a prescribed deemed expense ratio, also known as Fixed Expense Deduction Ratio (FEDR), to calculate their net income. This was a citizen-centric initiative: a service improvement initiative to simplify their tax-filing process. For example, taxi and private hire car drivers can opt to use a 60% FEDR while commission agents with gross annual commission income of not more than $50,000 can opt for a 25% FEDR. The FEDRs are reviewed regularly based on data collected to ensure that they remain relevant and reflective of the actual expenses incurred by the different groups of SEPs. To provide greater convenience to another group of SEPs, we propose to extend the FEDR option to self-employed delivery workers who are earning gross annual delivery income of up to $50,000. The ratios will differ depending on the delivery modes, as the workers would use different modes and would incur different levels of expenses, based on IRAS' consultation with the industry and the survey with the workers. Those who do not take up this option can continue to claim tax deductions based on the actual amount of tax-deductible expenses incurred in the production of their delivery income. This change found in clause 23 of the Bill will take effect from YA 2024 for income earned in 2023. Mr Deputy Speaker, I beg to move. [(proc text) Question proposed. (proc text)]”
“The new tax treatment will apply to foreign sourced disposal gains earned and received in Singapore on or after 1 January 2024. Clauses 6, 7 and 44 of the Bill will provide for this amendment. Second, we propose to mandate the submission of income information to IRAS by intermediaries for self-employed persons (SEPs). Since YA 2015, to simplify the tax filing process for SEPs, IRAS has been extending the pre-filling of income information scheme to SEPs and has been obtaining the income information of SEPs from intermediaries, such as commission agencies. The amendment will provide better clarity and certainty for intermediaries on the scope of information that may be obtained and their obligations to collect, retain and transmit the information to IRAS. Beyond easing tax compliance for SEPs and facilitating tax administration, the information will also enable public agencies to better administer schemes, such as Workfare Income Supplement (WIS) by identifying the SEPS who could benefit from these schemes more easily and quickly. This will enable the Government to roll out future schemes in a quicker and more efficient manner. IRAS will be adopting a phased implementation approach based on the readiness of industries with SEPs, starting with commission agents from YA 2024. IRAS will continue to engage the intermediaries in other industries, such as ride-hail service operators, to understand their needs and work closely with them in the onboarding process. Clause 47 of the Bill provides for these amendments. Finally, we propose to ease the compliance burden for individual taxpayers who are self-employed delivery workers.”
“Clauses 10, 12, 13, 14, 19, 22, 26, 34 and 54 of the Bill provide for these amendments. Mr Deputy Speaker, I will now move on to the non-Budget changes. Let me elaborate on three key proposed amendments. First, we will amend our tax treatment for foreign sourced income to subject foreign sourced disposal gains to tax under specific circumstances. This is to address international tax avoidance risks relating to non-taxation of disposal gains in the absence of real economic activities. Foreign sourced disposal gains will be taxable when received in Singapore by entities of multinational enterprise groups that do not have economic substance in Singapore. Tighter rules will also apply to disposal gains arising from IP rights due to the higher mobility of such assets. The policy objective of this move is not to tax capital gains in Singapore. Rather, we are making this move as part of our long-standing policy to align key areas of our tax regime with international norms. The new tax treatment is consistent with international standards, such as the rules against harmful tax practices agreed by the inclusive framework on Base Erosion and Profit Shifting (BEPS) of which Singapore is a member, as well as the European Union (EU) guidance on foreign sourced income exemption regimes. We do not expect the new treatment to have adverse impact on our economy as our focus has always been on attracting and anchoring real economic activities in Singapore. Some businesses, however, may face increased record keeping requirements. The Inland Revenue Authority of Singapore (IRAS) will work closely with the industry to minimise the compliance burden arising from this new treatment.”
“Mr Deputy Speaker, 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 Income Tax (Amendment) Bill brings into legal effect changes to our tax regime earlier announced at Budget this year as well as those arising from other policy reviews. We sought views from the public on the draft Bill in June. We thank the respondents for their inputs and have taken their feedback on board where feasible. Let me start by recapping a tax measure from Budget 2023. We introduced the Enterprise Innovation Scheme (EIS) to encourage businesses to engage in research and development (R&D), innovation and capability development activities. The scheme will be available from year of assessment (YA) 2024 to YA 2028 and grants enhanced tax deductions and allowances for five key activities in the innovation value chain. These are: R&D conducted in Singapore; registration of intellectual property (IP), including patents, trademarks and designs; acquisition and licensing of IP rights; innovation projects carried out with polytechnics, the Institute of Technical Education (ITE) or other qualified partners; and training by courses that are eligible for SkillsFuture Singapore funding and aligned with the Skills Framework. Under the scheme, eligible businesses can also opt to convert 20% of their total qualifying expenditure on the above activities in each YA into a cash payout of up to $20,000. This benefits businesses that have yet to turn profitable or do not have sufficient profits to maximise the benefits from the tax deductions or allowances. In all, businesses that make full use of the scheme could enjoy tax savings amounting to nearly 70% of their investment.”
“Mr Speaker, the short answer is yes. In fact, our target is to further increase the public transport modal share. It is not only because it will help with the cost recovery ratio or the financial sustainability of the public transport system – I mean, that is one benefit as Mr Liang highlighted – but also from the environmental sustainability point of view, because public transport is more environmentally sustainable than private cars. Certainly, I think that is a direction that we want to encourage Singapore to head towards.”
“So, if we do not find a way to re-allocate some of the resources from existing services to meet new demand, then the concern there is that the bill will keep growing for commuters and for taxpayers. So, when we have to take away some of these longer trunk routes, the considerations are, first, is there an alternative? So, we do not take away if there is no alternative. Second, is there a parallel Mass Rapid Transit (MRT) route or line that the commuter can take? The concept that I hope Mr Giam can help us as well to explain to his residents, is that we encourage people to take public transport as much as possible within the town, feeder services to bring them from their homes or near their homes to the key transport notes like bus interchanges and MRT stations. And then for the longer trunk routes, gradually as we develop our MRT system and it becomes better connected, a more efficient way is to use the MRT to cater to the demand for the longer trunk routes. So, think about it as feeder services mainly for the local, bringing you to key transport nodes; and then the MRT to cater to longer trunk routes. I think if we can help to move towards such a system, it will be more efficient and also from a connectivity point of view, better for commuters.”
“Mr Speaker, I think the last question that Mr Giam asked, I already explained earlier in my response to Mr Louis Chua that the PTC is mindful of the overall higher costs of living concerns of Singaporeans, and therefore makes a judgement call not to allow the full amount but to allow only less than one third. Sir, the first question that Mr Giam asked was about the quantum of the PTVs. We look at it differently. The PTVs are not designed or not intended to defray the total public transport expenditure, but rather, they are meant to cushion the impact of the fare increase on lower-income households. So, if you look at it from that point of view, we estimate that $50 would cover about six months of fare increase for these households. That said, I do agree with Mr Giam that families and households have different compositions – some have more members. I do acknowledge that point. The way we have done it, Sir, is as with past exercises, households with genuine needs but may have missed the eligibility criteria or if they need more help because they have a larger family size, they can appeal to their local community centres. For this round, they can start doing so from early-2024. The appeals will then be considered on a case-by-case basis. Sir, the second question that Mr Giam asks, I think we have discussed this previously, but allow me to just recap some of the key points. Sir, we do not rationalise or take away buses in a frivolous manner. I understand the concerns. This has to be very carefully considered because there are commuters who are affected. We try our best not to do that. But because there are new estates that are coming up, including, I am sure, in Mr Giam's constituency, we do need to also cater new feeder services to meet new demand.”
“We cannot tell – ex post, you can tell, but not ex ante. So, when this person comes in and wants to buy a concession pass, unless we set a limit to how many times this person can use the pass, which then goes against our current concession pass concept – which is once you buy the concession pass, it is unlimited, it is like a buffet, you can use as many times as you like. So, I think we can take a look, but I do not think we can implement the current all-you-can-use approach and have different tiers because it is not possible to tell ex ante whether the person is a light, moderate or heavy user.”
“Mr Speaker, I understand where Ms Mariam Jaafar is coming from. That is why in this year's FRE, the PTC has looked at how to lower the cost of the concession pass for the different vulnerable groups. Sir, before I respond to her question directly, allow me to briefly recap that we are providing help in a few ways. First, we subsidise public transport services by more than $2 billion every year. If you were to translate it to per journey, it is more than $1 per journey. For the coming year, there will be an additional $300 million subsidy to cover the fare deferment, which I have explained earlier, and these subsidies go towards helping commuters, because they help to cushion the fare increase that is needed. Second, for the concession card holders, they enjoy discounts of up to 70% of the adult per journey fares. So, this is even if you do not buy the concession pass, because we do have a separate rate for the different concession groups. And the benefit applies to all concession users, whether they are light users, moderate users or heavy users. I understand Ms Mariam Jaafar's point, that because today, the concession passes are set to cater to people who are heavy users – if I understood her correctly, I think she is asking whether we can have different tiers of passes. Sir, I think that it is not impossible. We can take a look to see how we can do this. We will ask the PTC to consider different options, whether there are ways in which we can provide more flexibility. But I just want to raise one factual point, that I hope Ms Mariam agrees with me, which is that it is quite difficult to tell ex ante when a person walks in and say, "I want to buy a concession pass", whether this person is a light, moderate or heavy user.”
“So, hopefully, over time, it will allow us to squeeze out more productivity gains, more savings, that we can then pass on to taxpayers and to commuters.”
“And in this year's fare review, the Government is providing $300 million of subsidies to cater to this gap. That is why I explained earlier that if we do not find ways, in subsequent years when we can, to gradually to reduce this gap, and if we expunge it, what it means is that the $300 million will remain as a permanent subsidy. And it will add on to the existing subsidies that we already provide: $1 billion for rail, $1 billion for bus. This will increase the burden on taxpayers. I appreciate Mr Chua's concern. I think it is a valid point that we do want to look at affordability on commuters, we do want to consider the impact, including on the overall cost of living. And that is why the PTC exercises judgement and it is not just driven by the formula. I hope that addresses Mr Chua's concern. Sir, Mr Chua also had a second point about the profit numbers and the financial sustainability of the public transport operators. I have explained this in my main reply as well. We need to look at bus and rail separately. For buses, the fares that are being collected do not go to the operators. We are discussing fare review here. The fares that are being collected actually do not go to the revenue of the bus operations. The revenue of the bus operations come from LTA, when we tender out bus contracts. And they bid and then, the service fee, based on the bids, that is what we pay them. I would be happy to share with the House that over time, as we do more bus contracting tenders and as of now, there are more operators – there are now four bus operators – the bids are also becoming more competitive and we have also refined the way we do the bus contracting, that the service fees and the margins have been coming down in the more recent contracts.”
“Mr Speaker, I thank Mr Chua for his two supplementary questions. Sir, the fare formula was revised last year and some of the changes that we have made to the fare formula is then reflected in this year's fare review. Sir, the inflation that we look at in a fare formula is captured under the Consumer Price Index (CPI). And yes, that is part of the fare formula. It is 0.5 times the core CPI. However, we also need to look at other components that affect the cost of the operators, but taken, as I explained my main reply, not their actual cost but as a benchmark looking at the national wage index and looking at the energy index, because these are significant cost components that will affect overall public transport operations. So, that is why the fare formula, using these components, we worked it out last year, we carried it forward, 10.6%. And this year, it was 12%. So, if you add that to the 10.6%, the total is 22.6%. But this is where – perhaps Mr Chua and myself, we may not disagree so much – that the PTC does not just go for the formula maximum amount and say, "It is 22.6%, therefore I go for 22.6%". That is not how it is done. As I explained, they will exercise judgement, they will consider the impact on commuters, on affordability and then after that, they will exercise judgement in terms of what is the level to set and how much to defer. This year, for example, the maximum amount that could be set was 22.6%. But the PTC did exactly like what Mr Chua mentioned, they factored in all these different considerations and they decided that we should only increase by less than a third, 7%, and the rest will be deferred. But when we say "deferred", what it actually means is that the Government is then topping up to ensure that this funding gap is provided for.”
“And these savings will help not only to keep our public transport system financially sustainable and avoid subsidies going up and up over the years, importantly, I think that it is also in the spirit of continuous improvement and we empower the workers to look for ways in which they can make things better, improve the processes and the ground-up initiatives are then given top-down support by management.”
“Sir, I thank Mr Yip for his two supplementary questions. On reliability, the public transport operators are subject to stringent service standards and we have not relaxed these standards. For rail, the measurement that we use is what they call the "mean kilometres between failures" (MKBF). Since 2019, MKBF has exceeded one million train kilometres. Under the Bus Contracting Model, frequency of all basic bus services, by which I mean trunk services, are 15 minutes or less during peak periods. Feeder services run even more frequently at no more than eight minutes during peak periods. The Land Transport Authority (LTA) will track the commuter demand and ensure that there is sufficient capacity by adjusting the frequencies where needed. And as I explained in this House previously, whenever there are new Build-To-Order developments, new demand, we will also look at whether we need to introduce new feeder services to serve these new estates. Sir, Mr Yip also asked about what are some of the productivity measures that the transport operators would embark on to reduce costs. Sir, this is an ongoing effort. In the fare formula, I explained that we have a productivity contribution component to incentivise them to do so, but on the ground, the operators have been working very closely with their suppliers, and also with the unions, with the help from our unions, together with the workers, to encourage a lot of ground-up initiatives. In SMRT, for example, they focus a lot on "kaizen". They use this as a movement within the organisation to identify areas for improvement, to improve safety, to improve reliability and to also reduce costs. When I visited SMRT, they shared with me that in the latest year, "kaizen" has allowed them to save more than $100 million, in total.”
“Concession cardholders who make fewer public transport journeys will continue to enjoy substantial discounts off adult per-journey fares. When fares increase, the PTC requires rail operators to contribute a proportion of their increased fare revenue to the Public Transport Fund. In the coming year, the rail operators will contribute a total of $16 million. Together with Government's contributions to the Fund, these monies are used to provide Public Transport Vouchers (PTVs) to help cushion the impact on lower-income households. The Government will increase the PTV amount from $30 in 2022 to $50 this year. Over the past decade, we have steadily enhanced the quality of our public transport system by expanding the network, and improving accessibility and reliability of services. These outcomes have been achieved through our strong tripartite partnership between the Government, operators and workers, while keeping fares affordable and the public transport system financially sustainable. This will remain our approach going forward.”
“We need to be clear that Government subsidies are ultimately borne by current and future generations of taxpayers. The PTC will continue to ensure that fare adjustments each year are affordable. In each future FRE, the PTC will assess the cost increases as reflected by the fare formula, the deferred fare amount from previous years, as well as the impact on affordability for commuters, before deciding on the fare increase to be granted for that year. And when the opportunity arises, the PTC will consider whether it is possible to lower the total deferred fare amount so the gap will gradually reduce over time. The PTC and Government are also mindful that fare increases affect different groups of commuters differently. While it is important that commuters bear their fair share of cost increases, we are committed to ensuring that fares remain affordable, especially for concession groups such as seniors, students, lower-wage workers and Persons with Disabilities. These groups enjoy discounts of up to 70% off adult per-journey fares. Within each concession group, there is a wide range of spending on public transport, depending on different commuting patterns. Among all seniors, persons with disabilities (PwDs) and individuals on the Workfare Transport Concession Scheme (WTCS), the median monthly spending on public transport is about $16, $24 and $35 respectively. As heavy users of public transport will be more affected by the increase in per-journey fares, we will reduce the price of hybrid monthly concession passes by up to 10%, and introduce a new discounted WTCS monthly pass. This is expected to benefit about 60,000 commuters, including about 1,600 WTCS cardholders who currently pay per-journey fares and spend more than the monthly pass price of $96.”
“I hope that is not what they have in mind. If it is to ask the public transport operators to absorb the costs, we need to consider how this will impact their financial sustainability over time and in turn, affect their ability to provide accessible and reliable public transport services. Mr Louis Chua asked about the profits of the public transport operators and Mr Don Wee suggested that we could freeze fares given that operators have been profitable. Sir, bus and rail services adopt different operating models. For buses, Government collects the fare revenue and pays the operators a service fee that is derived from competitive bids via bus contracting tenders. Overall, bus services are operating at a loss and that is why Government needs to provide about $1 billion in subsidies for buses every year. Expunging the deferred fare or freezing future fare increases will result in larger losses and higher Government subsidies. For rail services, the operators collect the fares to cover their operating costs, so fares do impact the rail operators' profitability directly. In the latest financial year, after accounting for Government grants, SBS Transit reported a loss of several million dollars for their rail operations, while SMRT Corporation (SMRT) Trains reported an operating profit of $6 million, which represents a profit margin of less than 1%. We should not pretend that the deferred fare increases can somehow be expunged and magically disappear, or assume that future fare increases can be frozen without consequences to our public transport system. Making such populist moves will further enlarge the funding gap over time which must be supported by higher Government subsidies funded by taxpayers. It is not the responsible thing to do.”
“Instead, the PTC decided on an overall fare increase of 7% – which is less than a third of the maximum allowable fare increase of 22.6%. The remaining 15.6 percentage points will be deferred to future years. To account for this funding gap, the Government will provide $300 million of additional subsidies in 2023, which is $100 million more than the previous year. This amount is on top of the $2 billion annual subsidies to fund bus and train services. In addition, the cost of public transport infrastructure is also fully funded by the Government. Mr Louis Chua asked whether the PTC plans to "expunge" the 15.6 percentage points. Mr Don Wee asked if the PTC can "impose a moratorium" on future fare increases. Mr Speaker, I am concerned that Mr Chua and Mr Wee are making these suggestions. Please allow me to explain why their proposals are not sound, as these will affect the longer-term reliability and financial sustainability of our public transport system, to the detriment of Singapore and Singaporeans. I had earlier mentioned that the fare formula reflects real cost increases in our economy, such as energy costs and wages. If the deferred fare amount is "expunged" as Mr Louis Chua proposed, or if fares are frozen for future years as Mr Don Wee suggested, it does not mean that these costs of running the public transport system will simply disappear into thin air. Hence, I would like to ask Mr Chua and Mr Wee to clarify whether they are proposing for the operators to absorb this cost, or for taxpayers to bear a larger cost burden to provide higher Government subsidies on a permanent basis? If it is the latter, they should elaborate how such a move will be funded every year and whether they are proposing for Singaporeans to pay additional taxes to do so?”
“This further incentivises the operators to look for continuous productivity improvements to reduce their costs. For example, the operators have been using joint tenders to achieve economies of scale, automating their maintenance processes and upskilling their workers to improve productivity. The fare formula therefore avoids operators' costs from being directly passed on to commuters, while allowing commuters to benefit from productivity savings from the operators. Guided by the formula, the PTC exercises judgement on how much of the allowable fare adjustment to implement each year, taking into consideration economic and social factors. For example, the PTC looks at affordability as measured by the estimated proportion of household income spent on public transport. For the lower-income, this proportion has fallen from 3.1% in 2013 to 2.4% in 2022. For average public transport users, the figure has also reduced from 2.2% in 2013 to 1.7% in 2022. The quantum of allowable fare adjustment that is not implemented in a particular year is deferred and carried forward to future years. In the 2022 Fare Review Exercise (FRE), the PTC deferred 10.6% percentage points of the fare increase. In this year's FRE, the fare formula output was 12%, driven by a 62% increase in energy prices, strong national wage growth at about 7%, and core inflation at about 4%. Adding the deferred quantum of 10.6% to the fare formula output, the maximum allowable fare increase for 2023 was 22.6%. To keep public transport fares affordable for commuters and understanding that Singaporean families are currently facing higher costs of living, the PTC again decided not to grant the full quantum this year.”
“Thank you, Mr Speaker. Sir, my reply will also address written Question No 14 by Mr Louis Chua for today's Sitting and related questions from Mr Gerald Giam1,2, Ms Hazel Poa, Mr Don Wee and Mr Leong Mun Wai for subsequent Sittings. Sir, in setting public transport fares, the Public Transport Council (PTC) is guided by the fare formula and aims to keep fares affordable for commuters, while ensuring that our public transport system remains financially sustainable. The fare formula reflects the general cost drivers of providing public transport services, based on macroeconomic factors such as core inflation, national wage growth and energy prices. It provides for fares to be adjusted in tandem with changes in these cost drivers, rather than changes in operators' actual costs. In this way, the operators cannot assume that their cost increases will be matched by correspondingly higher fares. Hence, they need to be disciplined in managing their costs and improving their productivity over time. This approach also applies to wage costs. In setting fares, the PTC does not focus on the actual salaries paid by the operators. The formula is based on the national wage index. This allows operators to keep public transport sector salaries competitive with the rest of the economy, so that they are able to attract and retain their workers. Wage increases that exceed changes in the national wage index will not be covered by the fare formula. Over the past five years, the wages of public transport workers grew at a similar pace as the national wage index. The fare formula also includes a Productivity Contribution, which reduces the allowable fare adjustment by 0.1 percentage points every year.”
“Mr Speaker, may I have your permission to take Question Nos 13 to 15 together?”
“The Land Transport Authority (LTA) requires all motor vehicles to undergo compulsory periodic inspections to ensure that owners regularly maintain their vehicles to meet roadworthiness standards. While electric vehicles (EVs) do not have an internal combustion engine, their high-voltage electrical systems, including the charging inlet, cables, traction batteries and electric motors as well as other components, including tyres, steering, lighting and braking systems, need to be checked for signs of wear and tear or damage. To ensure safety for all road users, there is currently no plan to reduce the inspection frequency for EVs. However, we will continue to review the inspection requirements regularly to keep up with technological developments and international best practices.”
“Running smaller-capacity buses at higher frequencies during off-peak will increase operating costs borne by commuters and taxpayers. Let me explain why this idea is not feasible in practice. First, the smaller buses will have to be procured in addition to existing larger buses, as the latter will still be required during peak periods when there are more commuters. Second, a small bus still requires a bus captain. To operate smaller buses at higher frequencies than the existing larger buses, more bus captains will need to be hired. And third, smaller buses have different operating and maintenance regimes compared to the existing bus fleet. This will increase operational complexity for the maintenance workshop and lead to higher maintenance costs.”
“Marina South Pier currently has 59 carpark lots, of which 23 are season parking lots reserved for tenants and operators at Marina South Pier, and 36 are visitor lots, including two electric vehicle lots. Marina Bay Cruise Centre Singapore has 323 visitor lots and no season parking lots. If there are no available lots at Marina South Pier, marine offshore workers can offload their equipment at the four loading and unloading bays at Marina South Pier before parking their vehicles at Marina Bay Cruise Centre Singapore, which is about a 10-minute walk away with a sheltered linkway. Due to space constraints, it is not possible to increase parking capacity at Marina South Pier and Marina Bay Cruise Centre Singapore. However, the Maritime and Port Authority of Singapore will be building a multi-storey car park at a site adjacent to Marina South Pier as part of "The WAVES" development, which will provide additional parking lots for workers and visitors going to Marina South Pier. This development is estimated to be completed by 2026.”
“As at 31 August 2023, 60% of bus interchanges and all interchange stations on the Thomson-East Coast Line have a baby care room with nursing facilities. All stations on the upcoming Jurong Region Line and Cross Island Line, as well as all new bus interchanges, will be equipped with baby care rooms. For existing Mass Rapid Transit stations and bus interchanges that have been built previously, a number of them are adjacent to major developments with nursing facilities, such as shopping centres. For the remaining stations and interchanges, the Land Transport Authority (LTA) will consider providing baby care rooms as part of upgrading works, subject to space availability and technical feasibility.”
“Mr Speaker, the tax collection, as I mentioned in my reply earlier, is in tandem with the performance of the economy and the GDP. There is a bit of time lag. So, we collect the taxes, say, in a particular period, it actually refers to the economic activity several months back in a previous period. That is why I mentioned that the collection, there is a certain momentum that we are seeing even in the current financial year arising from the stronger economic performance and recovery post-COVID-19 pandemic. But whether this can continue, this is something that we need to watch very carefully because, as Mr Ang would be aware, there are some dark clouds in the global economy and the economic outlook for this year is unlikely to be as strong as, say, last year. So, these are things which we have to monitor carefully. But, nevertheless, the point that I made in my main reply that we understand that there are cost of living concerns because that remains a concern for many Singaporean families and the Government will look at how we can provide more help. We will study whether there are ways to enhance the Assurance Package and, in particular, we have been providing not just vouchers but also cash components and many other types of assistance to Singaporeans within the Assurance Package and that is something that we will look at as well – how to channel the resources to provide the maximum impact.”
“Mr Speaker, our tax revenue collections have grown broadly in line with Gross Domestic Product (GDP). The higher tax revenue collection in financial year 2022 (FY2022), compared to the previous year, was due to our economic recovery after the COVID-19 pandemic. While some of this growth momentum has benefited tax revenue collections in FY2023, it is unclear whether the trend can continue due to the uncertain global economic outlook. The Government understands that cost of living remains a key concern. That is why we had enhanced the Assurance Package to $9.6 billion in Budget 2023 to provide Singaporeans with additional financial support. More support is provided to lower- and middle-income families, as well as seniors staying in both public and private estates. As Prime Minister Lee mentioned at the 2023 National Day Rally, the Ministry of Finance (MOF) is currently studying further enhancements to the Assurance Package. We will announce more details shortly, after the review is completed.”
“Mr Speaker, I thank Ms Phua for her suggestions and MOF will certainly consider her suggestions as we design the Majulah Package.”
“Thank you. Sir, the Majulah Package is meant to boost the retirement and healthcare adequacy of Singapore Citizens who were born on 31 December 1973 or earlier. The key segments we want to help are the “young seniors” who are now in their 50s and early 60s. They have benefited from Singapore’s economic growth and our investments in education, healthcare and social security. Hence, we have designed the Majulah Package to provide more support to those with lower incomes and less wealth. Nevertheless, we recognise that there may be concerns that are common to all Singaporeans within this group. The Ministry of Finance (MOF) will therefore consider these suggestions by Ms Phua and Mr Edward Chia, as we finalise the parameters of the Majulah Package. Details on the Majulah Package will be announced in Budget 2024.”
“Mr Speaker, may I have your permission to answer Question Nos 8 and 9 together?”
“As announced previously, the on-board unit installation will commence this year and take place progressively over the next few years. The Land Transport Authority will share more details in due course.”