Josephine Teo
Singapore
“The Government's risk-calibrated approach to data security in artificial intelligence (AI) systems was explained in a written reply, given on 9 January 2024, to related questions asked by Dr Tan Wu Meng and Mr Gerald Giam.”
“Access to frontier models is helpful for specific use cases, such as advanced research and cybersecurity. However, these form a small proportion of artificial intelligence (AI) demand. For most industry, Government and research uses, capable models are already available.”
“The Government tracks the development of technical standards for identifying artificial intelligence (AI)-generated content, including watermarking and digital provenance approaches, as part of broader efforts to manage AI-related risks.”
“Upon receiving a valid report of intimate image abuse, the Commissioner of Online Safety is empowered by law to direct Online Service Providers (OSPs) to disable access by Singapore users to the specified harmful online material. This direction may be extended to cover identical copies found on the platform.”
“The Government is committed to keeping children safe online. We have announced plans to extend age assurance requirements to designated social media services, including requiring platforms to keep users under 13 off their services.”
“Under the Online Safety (Relief and Accountability) Act 2025, the Commissioner of Online Safety is empowered to issue directions to platforms to remove specified harmful content, including intimate image abuse.”
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“Mdm Speaker, on the Member's first question, which relates to repetitive data requests, I thank her for her suggestion and we would be very keen to follow up with the Member and look at how we can, indeed, implement it. We agree that, as far as possible, if we can reduce the amount of effort required for data submissions by potential bidders, that is something that would be helpful. So, we will follow up with the Member separately. On the Member's second question, I am not sure I understand it completely. So, maybe if I could ask her for a clarification, she mentioned cost estimates currently do not take into account environmental sustainability. I am not sure what the Member is asking me to help push.”
“The Pro-Enterprise Panel (PEP) is another mechanism to address rules and regulations that hamper productivity. Businesses that face challenges navigating regulatory requirements may approach the PEP, which comprises senior public officers and business leaders. Since 2000, the PEP has reviewed more than 1,800 suggestions from businesses on rules and procedures and accepted more than half of them. Besides the PEP, there is a Smart Regulation Committee, which was set up to promote good regulatory design and practices across the Government and to benchmark our regulations against international standards. Madam, our systems and processes will continue to evolve. But we are committed to strengthening the coordination of policies and processes within the Government and with our partners and welcome suggestions on how we can do this better.”
“Mdm Speaker, the Government recognises that successful implementation of major initiatives will typically require aligning multiple stakeholder agencies. For example, to better align productivity efforts in the construction sector, the Building Innovation Panel led by MND and BCA brings together nine regulatory agencies, including NEA, SCDF and LTA, to facilitate multi-agency evaluation and approval of innovative products or processes that improve construction productivity. The Panel has made it easier for several new technologies to be accepted for use in building projects in Singapore, such as Prefabricated Prefinished Volumetric Construction and Cross Laminated Timber. The use of new technologies and materials support the broader measures taken upstream, namely the higher requirements for development projects' buildability and constructability scores which are themselves the result of multi-agency deliberations. That is a sectoral example. More broadly, we have also established tripartite and inter-agency platforms to coordinate and drive national efforts across different domains. This approach has been adopted for the long-term effort to restructure our economy towards higher skills and productivity, through the tripartite National Productivity Council (NPC). The NPC is supplemented by sub-committees with a sectoral focus. Page: 29 The multi-agency e-Gov Council is another case. It drives and coordinates the improvement of electronic services to businesses and citizens. A recent example is the processing of applications by property developers to pay an additional charge to enhance land value. By streamlining workflows and using a common IT platform, URA and SLA are able to process applications concurrently, reducing approval time.”
“Madam, the main reason is really safety, especially if there are manned aircraft flying nearby. We do not want to compromise safety. So, those were the main reasons that the 20%-30% were not approved.”
“Madam, I thank the Member for his questions. The first one is related to how many permits were granted for unmanned aircraft below seven kilograms of weight. First, to share what the number of applications was: just in the month of January 2015 alone, there were 70 applications. This is a six-fold increase over the average of 12 applications per month a year ago in 2014. How many of those applications were approved and permits granted: between 60% and 70% were approved and just 20%-30% were not approved. The second question was about the review period. This is a multi-agency effort and, as we are doing a review, we are also taking a closer look at countries, such as the US and Australia, who are similarly looking into their regulatory framework. There are obviously lessons to be learnt and also experiences to be shared. The consultation with the relevant stakeholders is going to take place in the next few months. We will have to look at how extensive the regulations are going to be and then we will be able to say with a firmer sense the timeline required. In relation to Dr Lim's interest, I think we can keep him posted on the progress.”
“As a general principle, enforcement action will be taken against the person carrying out activities which constitute Page: 13 an offence under existing laws, such as the Penal Code. With regard to the operation of unmanned aircraft across international boundaries, there are international rules which prohibit such movements, unless authorisation has been issued by the States in which the flight is to operate. Prior coordination with the appropriate air traffic services authority is also required for operation over the high seas. In Singapore, contravention of these rules may lead to a fine not exceeding $100,000 and/or imprisonment for a term not exceeding five years.”
“Mdm Speaker, there are existing regulations for unmanned aircraft operations under the Singapore Air Navigation Order. Unmanned aircraft weighing more than seven kilograms without its fuel are subject to the same strict regulations and controls as manned aircraft, such as registration, airworthiness and flight operations requirements. For unmanned aircraft weighing seven kilograms or less, a permit from the Civil Aviation Authority of Singapore (CAAS) is required if the aircraft operates within five kilometres of an aerodrome, or at an altitude higher than 200 feet above mean sea level when outside five kilometres of an aerodrome. All operators of unmanned aircraft, regardless of whether a permit is required under current regulations for operating such an aircraft, are responsible for operating their unmanned aircraft with the safety and security of others in mind. My Ministry and CAAS, together with other Government Ministries and agencies, have started a review of the regulatory framework. The review will address how we can facilitate the increasing usage of unmanned aircraft while managing the associated safety and security concerns. We are assessing the feasibility of differentiated levels of oversight for different uses. We are also studying if there is a need to register unmanned aircraft systems and specifying where such systems can or cannot operate. We will be consulting the relevant stakeholders in the coming months. On the concern over security and privacy, incidents, where a person is found prying into another person's property using an unmanned aircraft, will be assessed on a case-by-case basis, taking into consideration the context and circumstances.”
“Page: 12 In contrast, under a Pay-As-You-Bid system, bidders are likely to have to spend more time and transactional costs monitoring the bidding and adjusting their bids incrementally. That said, whatever the debate on the merits and demerits of different auction models, we should acknowledge the fact that COE prices are fundamentally dependent on demand and supply.”
“Mdm Speaker, both issues raised by Mr Gan were suggested as possible ways to ease COE prices in 2013 and the Land Transport Authority (LTA) had consulted extensively on them. Views on banning dealers from bidding for COEs were mixed. Some felt that dealers provided a convenient service when bidding on buyers' behalf. This approach also allowed the cost of the COE to be financed together with the vehicle cost in a loan package. Others noted that banning dealers from bidding would not lower the price of COEs as the dealers' bids were ultimately a reflection of the underlying demand and buyers' willingness to pay. Some also pointed out that a ban on dealers bidding could be easily circumvented, for instance, by the buyer providing personal details to the dealer to bid in his name. On the other hand, arguably, having a wider pool of bidders can make the auction and price discovery process more robust. On balance, the LTA decided to maintain the current system which gives vehicle buyers the flexibility to bid for themselves or have dealers bid on their behalf. The Pay-As-You-Bid model was also consulted on. It should be noted that, empirically, 80%-90% of the successful COE bids are typically clustered within 5%-10% of the final COE price. This suggests that the current bidding model is fairly robust, with not many extreme bids. In fact, experts in auction theory agree that the current system, which prices all COEs within a category uniformly, incentivises bidders to bid their true valuation. It also levels the playing field between the well-informed and the less-informed participants and it is the most efficient allocation mechanism.”
“Madam, as I have explained earlier in my reply, it is something that we have to be quite careful in thinking through. The more categories we split them into, it means that, within each category, the numbers that can be made available for bidding each cycle would likely be much more volatile. And we have to ask ourselves whether that is, in Page: 35 fact, helpful to small businesses. So, we understand completely where Er Dr Lee Bee Wah is coming from. But we also have to ask whether the alternative that the Member has suggested is, in fact, going to be helpful to SMEs. And, please, let me assure Members that if it is something that is, indeed, likely to be beneficial, there is no reason why we cannot consider it.”
“They need the vans for their business. So, I would like to ask whether there is any difficulty in allocating a certain number of COEs for the small vans.”
“So, that facilitates their cashflow management. Thirdly, we introduced the early turnover scheme where businesses can transfer any unused COE life to a new vehicle and enjoy discounts if they replace their more pollutive pre-Euro and Euro-1 diesel commercial vehicles. In addition, they do not need to bid for a new Cat C COE. They only need to pay a discounted prevailing quota premium for such vehicles when they turn it over. And since the scheme was enhanced in March last year, in fact, the discount on the prevailing quota premium is, on average, $23,000, a very considerable amount. That is why we have seen a steady increase in the take-up on the early turn-over scheme. These are some of the measures that we take to help businesses where vehicles are concerned. These measures are also complemented by other Government schemes to assist all SMEs directly with tax deductions, grants or micro loans. As to the Member's second question on how many COEs will become available, your guess is as good as mine. It really depends on several factors. It depends on how many vehicles are deregistered and it also depends on what is the permitted vehicle growth rate, which we have already given indication of. But deregistration really depends on the vehicle owners themselves. Analysts have given their own projections and forecasts. I think it is something that we will only really know when the deregistrations take place. Er Dr Lee Bee Wah: I thank the Senior Minister of State for the answer. But we cannot, because of the example of the taxi COEs not achieving the effect that we would like to see, that we should not try to come up with a category for the small vans. The feedback is that many of them, they have already renewed the COEs, but how many times can they keep on extending it?”
“Mdm Speaker, as Er Dr Lee was asking the question and expressing the concern that bigger companies were outbidding smaller companies which need smaller vehicles in Cat C, it reminded me of an argument that was made very strongly just one or two years back that if we removed taxis from Cat A, we would see a very different premium. In any case, we did remove taxi companies from bidding in Cat A, but I think the results suggest that that argument was probably unfounded. So, to the Member's suspicion, it is not something that we can prove or disprove. But I would say, the point that the Member raised that we want to attend to is that some smaller businesses do face pressures in terms of needing a vehicle for their business. Where we have put our efforts is in trying to be helpful to businesses in general, and small businesses in particular, where they need vehicles for the smooth operation of their businesses. There are several measures to help them manage the cost of vehicles. Firstly, for example, commercial vehicles are subject to lower vehicle taxes. And when businesses purchase a vehicle, the Additional Registration Fee for commercial vehicles is set at 5% of the vehicle's Open Market Value (OMV), compared to an effective rate of between Page: 34 100% and 180% of the OMV for cars. Commercial vehicles also enjoy lower effective road tax and are exempted from diesel fuel taxes. Secondly, businesses are allowed repeated five-year renewals of their COE. Earlier on, I mentioned that 31,000 small delivery vans will have their COEs expiring between now and 2017. A large majority – more than 80% of them – have more than five years of statutory life remaining. They can thus choose to go for two consecutive five-year renewals, instead of renewing directly on a 10-year COE.”
“Secondly, how many COEs will be available over the next three years, as the Senior Minister of State mentioned earlier that 31,000 COEs will be expiring?”
“Madam, about 31,000 small delivery vans will see their Certificates of Entitlement (COEs) expire between now and 2017. Page: 33 All goods vehicles and commercial buses, whether large or small, fall within Category (Cat) C of the COE bidding system. It is not desirable to have too many categories catering to different vehicle sizes as it can lead to excessive volatility in quota numbers and prices in each category. Objectively speaking, the COE system has served us well in controlling the overall vehicle population. Road pricing, on the other hand, helps us manage regular road congestion by influencing road usage decisions. The two systems complement each other. A satellite-based Electronic Road Pricing (ERP) system will certainly allow us to have more precise usage pricing, such as through distance-based charging on congested roads, and we will be reviewing in the next few years before ERP2 is implemented at the end of this decade, whether any of our policies could be improved. However, fundamentally, in land-scarce Singapore, controls on both vehicle ownership and usage will still be needed. Er Dr Lee Bee Wah (Nee Soon): Mdm Speaker, I would like to ask two supplementary questions. COE, to a large extent, has controlled the population of cars. However, because the big trucks, big lorries and small vans are all placed under the same categories, a lot of feedback says that because of the fierce tendering system, the smaller companies, the small and medium enterprises (SMEs) which need the small vans, cannot compete with the big companies who have the capabilities and the muscle to tender for the COEs. I would like to ask: is there any other way to help the SMEs which need the vans for their businesses?”
“Madam, I would like to invite Mr Seng to let me know who these individuals are and then we can reach out to them and see whether there is some way that we can help them.”
“Madam, in response to Dr Neo, we are very mindful that there will always be members of the Pioneer Generation who saw Singapore through the most difficult periods of our development and they themselves may still have difficulties today. The approach that we would like to take is to reach out to all the Pioneers, as many as we can, and help them to benefit from the package. It bears repeating that in setting the criteria, in terms of age, as I explained earlier, we had already been more inclusive. In terms of the citizenship criterion, the cut-off was set at 1986 and, in fact, it is 21 years after Independence.So, even in that criterion, I think that we have tried to be as generous as possible. So, for the members of our community who are not in any way able to benefit from the Pioneer Generation Package, if they are Singapore Citizens, there are other benefits that apply to them, including the MediSave top-ups that we have made available for five years to all those aged 55 and above. For the subsidies, for the forthcoming implementation of MediShield Life, they would likely also be able to benefit from it. And with these other forms of support, there is still a need, I think we would very much like to know who these individuals are and find other ways to help them.”
“As of 31 December 2014, the Appeals Panel has received about 2,900 appeals, of which about 2,480 have been evaluated, comprising 85% of all appeals received. As we explained in response to an earlier Parliamentary Question (PQ) and during the debate on the Pioneer Generation Fund Bill, the Panel recognised that the Government had already adopted a more inclusive approach by extending the Pioneer Generation Package to all those born in 1949 or earlier. Whatever the age set, there will always be those who marginally fall short of it. It would, therefore, not be feasible or fair to let age-related appeals without extending the new age Page: 25 criterion to all Singaporeans. Hence, as provided under the Pioneer Generation Fund Act, the Panel decided that it would only consider appeals relating to the citizenship criterion. As part of the evaluation process, the Panel considers whether the person had obtained Singapore citizenship shortly after 1986 – the year set as the citizenship cut-off date for eligibility of the Pioneer Generation Package. In addition, it looks at factors, such as whether he or she had been in Singapore since the early years of independence, contributed to our society and demonstrated clear efforts to sink roots in Singapore. To date, the Panel has approved 642 of such appeals.”
“Putting this aside, the key question is whether the so-called shortcoming is something that should be a major concern to us. I would like to reiterate the point, Madam, that it is relevant mainly for foreigners working here for whom the CPF is not applicable. Members would agree with me that our primary concern should be for Singaporeans, unless Mr Yee thinks otherwise.”
“Mdm Speaker, since the Member Mr Yee had talked about Singapore's specific score on retirement adequacy, with your permission, I would like to take a step back and I do not mean to be technical or to suggest that the index is unhelpful in any way. But I think each time we look at such indices, there is some value to investing the time to understand how they are constructed and what they actually measure. As far as we know, where corporate retirement plans are concerned, the index assigns a higher score to countries which provide tax advantages for such private plans. In other words, there is a particular item in this index and if a country provides tax advantages for providing private plans, then you would score higher on it. It does not matter whether there are, within that country, schemes like the CPF or even the fact that there are tax benefits for Page: 24 voluntary contributions to the CPF, for example, through the Minimum Sum Top-Up Scheme; none of those things matter. In fact, if we think about it, even in the absence of private plans on a large-scale basis, employers in Singapore are already required to contribute 17% to an employee's retirement savings through CPF. That is our CPF contribution rate. And you compare that to Australia where the mandatory contribution is 9.5%, and Denmark which came up tops in this study, the mandatory contribution is between 6% and 11%. If you look narrowly at this score, then you could be led to draw a certain conclusion and forget the fact that even in the absence of large-scale retirement plans – private plans, corporate retirement plans – actually, employers in Singapore are already contributing quite a lot to employees' retirement savings through CPF.”
“Mdm Speaker, Mr Yee has asked about the relative absence of corporate retirement plans, which he believes has contributed to a low score for Singapore in the Mercer Melbourne Global Pension Index. Madam, in this study, Singapore was ranked overall ahead of other Asian countries as well as developed countries, such as Germany and the United States (US). Mercer described our system as one with "a sound structure, with many good features, but has some areas for improvement." Given that employers in Singapore make mandatory contributions to their local employees' Central Provident Fund (CPF) savings, the observation in the study about corporate retirement plans is relevant mainly to foreigners working here, for whom the CPF Page: 23 is not applicable. The Income Tax Act already provides tax deductions to employers if they wish to provide corporate retirement plans for all of their employees, including foreigners. In addition, foreigners who wish to save on their own may tap on the Supplementary Retirement Scheme (SRS). They will enjoy tax benefits on the SRS contributions they make. We will continue to review the SRS scheme from time to time. For the majority of Singaporeans, the CPF remains at the core of our social security system. Beyond mandatory contributions, both individuals and employers can make voluntary contributions to the CPF accounts and enjoy tax benefits. For the less well-off, the Government provides support through top-ups to their CPF accounts, such as through Workfare and housing grants and the enhanced interest scheme.”
“Madam, I thank you for the opportunity to make a clarification on the Pioneer Generation Fund Bill that was passed yesterday in Parliament without amendment. During the Second Reading, Ms Chia Yong Yong told the House she wished to move an amendment to clause 3 of the Bill on the "Purpose of Act". She suggested removing the phrase "them who are now elderly and are or may be in need of", and replacing it with the word "Pioneers" so that there was no confusion whether the benefits of the Pioneer Generation Package need to be means-tested. Members will recall that in response to Ms Chia's speech and proposal, I had made clear that the Government would not be applying means-testing to the Pioneer Generation Package. Following my clarifications, the House did not agree to her proposed amendments, most likely also due to its very short notice which meant that there was no time to consider its substance and possible implications. Likewise, MOF needed to consider the proposal, given the importance of the Bill, and, as I said in Parliament yesterday, we would do so and, if necessary, introduce a Notice of Amendment. We have taken a look at the Bill in the short time since and agree that we should refine clause 3 to better convey the intent of the Pioneer Generation Package and avoid any doubt that the Fund could become restricted to providing relief to only the financially needy. We will formulate this amendment and bring it to Parliament when it is opportune to do so, most likely, together with a Bill of an appropriate nature. Once again, I thank Ms Chia for her thoughtful suggestion and support of the Bill. Page: 46”
“Mdm Speaker, I beg leave to make a clarification.”
“Mdm Speaker, in response to the Member's first question, the answer is, yes. We make use of all available data, including those that are available through Page: 39 the taxi companies. In response to his second question on whether there are plans to review the quality of service standards that taxi companies are currently required to meet, what Mr Pritam has highlighted is the fact that when we have these third party applications, it could affect the taxi companies' ability to fulfil those quality of service standards and it is, therefore, relevant for us to take a look at whether these third party applications impact the quality of service standards being met. So, we would take a look at the data first before coming to a decision.”
“(proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)] Page: 72”
“MOF and IRAS have also reviewed feedback and found that there is an issue with R&D submissions by SMEs. Quite a number of them do not qualify due to insufficient information provided to support their R&D claims or lack of clarity in understanding the qualifying criteria. In this regard, I agree with Mr Yee that we have to make a greater effort to reach out and to Page: 71 help our SMEs understand what the scheme is about and also to take feedback from them on how we can continuously improve on the administration of the scheme. One of the ways in which we have done so is to release a revised e-Tax Guide that provides more clarifications on the R&D qualifying criteria, explanations of its review process for R&D claims and the types of documentation that companies can use to substantiate their R&D claims. To further help the SMEs, IRAS has also published a simplified set of guidelines on its website and will certainly work with the SMEs to identify alternative ways of supporting their R&D claims. IRAS is also willing to provide more examples of qualifying industry-specific R&D activities, starting with the Information Communications and Technology (ICT) sector and the F&B industry. In other words, what IRAS will do is to go sector-by-sector and say what kind of activities within each sector will qualify for R&D support. So, the revised guidance should help SMEs with their R&D claims. Mdm Speaker, I beg to move. [(proc text) Question put, and agreed to. (proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] [(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mrs Josephine Teo].”
“So, that is the intention when we require that the automation equipment be "in use". But, Madam, the more important point that I wanted to highlight to Members is that in deciding to tighten and introduce some of these anti-abuse measures, we have been very careful in that they ought not be a very broad sweep and it has to be targeted at where the problem arises and we know from the task force that has been formed and the investigations into cases that have been brought to IRAS’ attention, that the abuses tend to occur for the cash payouts. In other words, besides the cash payouts, where the claims of PIC benefits are to offset the taxes payable, there have been very few problems. It is really, where cash payouts are concerned, that it appears, to some unscrupulous intermediaries or businesses that are not bona fide, to be a very easy way to get hold of cash. So, the anti-abuse measures are not broad sweeping. They are targeted at mainly those that involve PIC cash payouts. That is still our intention to make sure that the anti-abuse measures are not in any way standing in the path of genuine businesses trying their best to make productivity improvements. Mr Yee had also highlighted his concerns about R&D and whether there is a two-way engagement between IRAS and the potential applicants. We had started by talking about some businesses being of very small scale and Mr Yee has given suggestions for future amendments to consider whether the M&A scheme can be improved. Therein lies the difficulty that when we see that the level of R&D activity amongst SMEs is not as high as we would like it to be, one of the contributing reasons is that many of them remain very small. So, in terms of SMEs undertaking R&D activities, that has been one challenge.”
“In other words, if we add up all the businesses – SMEs that have taken advantage of PIC to embark on productivity improvements – I believe that the number is bigger than 42%, because 42% is the number of SMEs that applied in the most recent year. So, that is part of our challenge and it is an ongoing one. It is going to be a multi-year effort, it is not going to happen overnight and it is going to require sustained effort. Mr Yee sought clarification and this was in relation to the tightening of the disbursements of cash payouts. He wanted to know when IRAS required that the automation equipment be "in use" in a business before it would consider disbursing the cash payout. And he wanted to know when we say "in use", what is it referring to? I could outline briefly what we are looking for. Page: 70 At the minimal, for the equipment to be "in use", it ought to be on the premises or in the place of operation of the business. In other words, it is deployed for the purposes of the business. It is not sitting in the warehouse or, in some cases, not yet even delivered and only an order has been placed and it is, perhaps, not even being manufactured yet. So, "in use" has to be minimally within the premises or the place of business. Another consideration would be that the business has an intention to use this automation equipment. The example that Mr Yee raised, supposing this was to be used as standby equipment for disaster recovery or some other purpose, the business is very well in a position to articulate its intended use and they can explain to IRAS what that equipment is being deployed to do. Even if it is as a standby equipment for disaster recovery, they can explain what that automation equipment is being used for.”
“Mdm Speaker, first, let me thank the Member, Mr Yee, for his suggestions on the M&A scheme. Indeed, I think one of the issues that he highlighted is that some companies are so small that it is quite difficult for them to have the capacity – the bandwidth – to undertake not only R&D activities, it is even difficult for them to get started on productivity improvements. But what I am glad to share with Members is that, notwithstanding the difficulties, actually, our SMEs have done quite well in terms of embarking on the productivity journey. If Members recall, we started PIC about three, four years ago and, in the first year of its implementation, at the time, just about one in three of the SMEs were able to file claims and enjoy the benefits of PIC. So, it was 34%. If we fast forward three years down the road, that number has gone up to 42%. So, we have seen an improvement in terms of the take-up of PIC amongst businesses. Some of it can be attributed mainly to just greater awareness. Others can be attributed to enhancements in the schemes so that they provide more timely support to the SMEs in their pursuit of productivity improvements and we would like to see this continue and that is why the scheme is being extended for a further three years. We hope that that gives businesses that sense of urgency to embark on their productivity journey. Forty-two percent may not seem like a big enough number but I just want to remind Members that it is 42% in a particular year. Cumulatively, if we add it up, in fact, the number could be larger.”
“The changes will allow Singapore to be in a position to engage in spontaneous exchange of information (EOI), as well as administer group EOI requests, both of which are requirements under the Convention. Spontaneous EOI refers to an instance where IRAS, in the course of tax assessment, comes across information which it thinks is relevant to a foreign tax administration and transmits the information to that tax administration spontaneously on its own accord. Group EOI requests are requests for information on a group of persons where the persons are not individually identified, but can be identified as a group using certain unique characteristics. For example, a country may ask for information on its nationals who bought a certain product from a certain bank over a specified period. Such international cooperation measures are increasingly adopted by countries working together to combat cross-border tax evasion and our moves are in line with that of a responsible tax jurisdiction in the international community. To harmonise our tax cooperation framework across all EOI instruments, we will also incorporate these two changes in other relevant arrangements such as Avoidance of Double Page: 67 Taxation Agreements. The changes are provided for in clauses 2 and 61 to 63. The remaining legislative changes are mostly technical in nature or relate to improvements in tax administration. Mdm Speaker, I beg to move. [(proc text) Question proposed. (proc text)] 4.16 pm”
“These changes are not expected to affect businesses making Page: 66 bona fide PIC claims, but seek to deter the small minority of businesses which attempt to make artificial or inflated PIC claims. IRAS will also continue to ensure timely disbursements to businesses for their legitimate claims. The second amendment arising out of our regular and periodic review is to allow expenses incurred by a person for the purpose of complying with statutory and regulatory requirements of his business, to be tax-deductible with effect from YA 2014. This promotes good corporate governance and voluntary compliance with statutory and regulatory requirements. The change is provided for in clauses 27 and 28 of the Bill. Third, we will allow Supplementary Retirement Scheme (SRS) members who have reached the retirement age to withdraw investments from their SRS accounts without the need to liquidate the investments. Currently, such SRS members can only make withdrawals in the form of cash. This necessitates the liquidation of SRS investments. To reduce transaction costs for SRS members, they will be allowed to withdraw their SRS investments by transferring them into another investment account, such as their personal Central Depository accounts, without the need for prior liquidation. Similar to cash withdrawn from the SRS accounts, the value of such SRS investments withdrawn will be brought to tax. Clauses 5, 53 and 57 provide for these. Fourth, we will amend the Act to enable Singapore to ratify the Convention on Mutual Administrative Assistance in Tax Matters. This is a multilateral exchange of information treaty that Singapore signed in May 2013 to enhance Singapore’s international tax cooperation framework.”
“The change will help maintain a level-playing field for these banks as their distributions will be deductible, similar to the tax treatment accorded to banks incorporated in countries like the United Kingdom. These are provided for in clauses 6, 8 and 48. Fourth, the quantum of parent relief, handicapped parent relief and other handicapped dependant-related reliefs will be increased from YA 2015 to provide greater recognition to individuals supporting their dependants. We will also allow sharing of the parent relief and handicapped parent relief among claimants according to a proportion agreed between the claimants. This is provided for in clause 45. Madam, MOF regularly reviews and refines the income tax regime. I shall now outline other key changes arising from MOF's periodic review of the tax regime. First, we will introduce anti-abuse measures for the PIC Scheme. IRAS has come across abusive arrangements aimed at artificially creating or inflating PIC claims, especially where cash payouts are involved. While such cases constitute a minority of PIC claims, additional measures are necessary and have been included in the Bill to tighten the qualifying conditions for PIC cash payouts, as well as to target abusive arrangements and the intermediaries who promote or facilitate such arrangements. These measures include: requiring a PIC automation equipment to be in use before an application for PIC cash payout on the equipment can be made; strengthening the Comptroller’s powers to deny PIC benefits arising from PIC abusive arrangements; and imposing penalties on intermediaries who promote or facilitate PIC claims for such abusive arrangements. These changes are elaborated in clauses 40 and 42.”
“The cost of training such staff is borne by the respective entities to which the employees are deployed or seconded and should rightly be supported by PIC since they also improve business productivity. This change was made in response to industry feedback. Second, the additional 50% tax deduction for R&D activities has been extended for 10 years till YA 2025 and the scheme to allow writing down allowance for acquisition of Page: 65 Intellectual Property Rights has also been extended for five years till YA 2020. In line with the definition used by the World Intellectual Property Organization, intellectual property rights must be creations out of intellectual activities and we have, therefore, added a negative list to exclude items which do not meet the definition. We will be excluding customer information and documentation on work processes, such as Standard Operating Procedure manuals, that do not contain any industrial know-how. However, documentation on work processes containing industrial information or techniques that will assist in the manufacturing or processing of goods or materials will continue to qualify for the writing down allowance under section 19B in the proposed legislation, provided that they relate to industrial know-how that can be legally protected. These are provided for in clauses 20 to 22 and 30 to 32. Third, we will make clear that Additional Tier 1 hybrid instruments issued by Singapore-incorporated banks will be treated as debt for tax purposes. This means that distributions on such instruments will be deductible for issuers and taxable in the hands of investors, unless specifically exempted from tax.”
“Mdm Speaker, I beg to move, "That the Bill be now read a Second time." The Income Tax (Amendment) Bill 2014, or "the Bill" for short, covers income tax changes announced in the 2014 Budget Statement as well as other changes arising from the periodic review of our income tax regime. The draft Bill was released for a public consultation exercise from 4 to 24 July this year. MOF has evaluated all the feedback received and, where relevant, accepted the suggestions. Madam, the tax changes announced in the 2014 Budget Statement have already been debated in this House. Let me highlight the key changes. First, the Productivity and Innovation Credit, or PIC Scheme, has been extended for three years till Year of Assessment (YA) 2018 to provide more time for businesses to put in place productivity improvements. We have also introduced a PIC+ Scheme to provide additional support to small and medium enterprises (SMEs) which are making more substantial investments to transform their businesses. Under the PIC+ Scheme, qualifying SMEs can enjoy a higher expenditure cap of $600,000 for each PIC qualifying activity per YA. This is 50% or $200,000 more than the existing PIC cap of $400,000. Other enhancements have also been made to the PIC Scheme. From YA 2014, businesses can claim PIC benefits for training of seconded staff from other organisations or persons working for them under centralised hiring arrangements. Such arrangements are quite common in the hotel and food & beverages industries and occur when the hiring function of a group of companies is centralised in a single entity and employees are subsequently deployed to related entities within the group.”
“Mdm Speaker, with your permission, if I may just touch on the earlier proposal by the Member, Ms Chia, on clause 3. Although the Bill would be passed, I think we want to make a note that we will still take a look at the Bill again and, if it is possible to do so, introduce a Notice of Amendment. So, I just wanted to put that on record. [(proc text) Bill reported without amendment, read a Third time and passed. (proc text)] Page: 64”
“Chairman, point of Order. As you have indicated, Madam, the notice for amendment came very late. It really has not given us enough time to consider this. I wonder if it may be possible to put this to a vote at a later time, possibly tomorrow, because we are likely to have to sit tomorrow.”
“Yes, Madam. In fact, in section 3, it more or less falls within the preamble of the Bill. In the preamble of the Bill, we described the intent of the Bill. In describing the intent of the Bill, we provided the background as to why the Government has decided to put forward a package that would provide relief to Pioneers in their twilight years. It is meant to focus on supporting them in their healthcare expenses. One of the reasons that we provide for putting up the PG Package is to record the fact that in the earlier years of nation-building, many of our citizens would not have been in a position to save very much or to accumulate balances that would help them in their retirement years. And that is primarily because their wages were not very high in those years. So, it is really intended as a provision of a background and I think it has to be read in that context. That is why I reiterate and really hope that Ms Chia can take it from that perspective.”
“Mdm Speaker, with your permission, I would like to humbly request Ms Chia to reconsider tabling this notice of amendment. As I have explained in my response speech to the Member's comments during the Second Reading, the intent of the Pioneer Generation Fund Bill is really not to restrict the benefits at all. The line in which she referred to in section 3, in fact, is merely a statement of a fact. This clarification would already stand part of parliamentary records. As to the proposed amendment to clause 18(2), in fact, it would restrict the provision or benefits to the extent that was not intended by the PG Package. We do not think that it is necessary to insert the words "or if the Minister deems it expedient in the public interest to so declare". In other words, we do not think there is any need to give the Minister this power to exclude any particular group of Pioneers or any Pioneer from enjoying the benefits. So, I just want to make that clarification.”
“Now, they are very important feedback that we should rightly share with MOH in whose purview these schemes lie and which will need to be involved in making the improvements. So, I give Ms Chia and Members the assurance that we will take it up with MOH and we will explore ways in which we can ensure that the implementation Page: 60 process makes access to the scheme more seamless. Once again, I thank Members for their very thoughtful comments and for their support of the Bill. In closing, I could not help but be struck by Ms Chia's speech, especially the second half. I think she said something that I have felt for a very long time, ever since I began serving as a Member of Parliament. She said, if I may quote, that "loneliness is not a condition that the Government or a VWO can relieve. Love is not something that the Government or a VWO can give". She is very right. And in the passing of this Bill, I also join her in calling on all Singaporeans to work together with the state to galvanise more efforts to provide the Pioneers with a dignified twilight. Mdm Speaker, I beg to move. [(proc text) Question put, and agreed to. (proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] [(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mrs Josephine Teo]. (proc text)] [(proc text) Bill considered in Committee. (proc text)] [Mdm Speaker in the Chair] [(proc text) Clauses 1 to 2 inclusive ordered to stand part of the Bill. (proc text)] [(proc text) Clauses 3 to 17 – (proc text)]”
“Ms Chia had a suggestion to provide for a verification application for an individual under mental incapacity to be made by a Court-appointed deputy under section 13(3) of the Bill. The Appeals Panel has operated for a while under the current provision and it has not encountered such an instance. Nonetheless, we understand where Ms Chia is coming from and we will keep the suggestion in view. I can also give Members the assurance that we will exercise flexibility when it comes to accepting appeals on behalf of persons with mental incapacity. The intent is to evaluate the appeals on their own merits than the way in which they are received. Yes, there is a provision in the Act but I can give Members the assurance that we will be willing to exercise flexibility in accepting appeals. Ms Chia has also suggested that we consider the need to reserve discretion to exclude or restrict any Pioneer or class of Pioneers from receiving benefits under the Bill, where it is expedient in the public interest to do so. There is actually no need for us to reserve this discretion as the PG Package is a commitment by the Government to all Pioneers that they will receive these benefits for life. Such a clause would be counter to this intention. Ms Chia raised several very useful points on the PioneerDAS, ElderShield, Interim Disability Assistance Programme for the Elderly (IDAPE) and the Foreign Domestic Worker (FDW) Grant. She is right that we should endeavour to make access seamless. Her point also underscores the challenges that the Government faces when introducing new schemes and the tremendous effort that needs to go into their implementation, so as not to confuse citizens and make it seem as though they have to jump through multiple similar hoops in order to access the benefits.”
“On age-related appeals, the Panel had deliberated on the matter extensively and it was a very difficult debate. It recognised that, for any age criterion, there will be those who marginally fall short of the criterion. Some appeals pointed out that they actually missed out the 31 December 1949 criterion by a mere few hours. So, the Panel has decided that, as difficult as it is, it was not feasible or fair to allow age-related appeals without extending the new age criterion and to all Singaporeans. In other words, shift the line completely. It is decided that it is not feasible to do so and, so, the Bill reflects these decisions accordingly. Page: 59 Let me now turn to Ms Chia Yong Yong's points. Ms Chia has asked to replace the line, I quote "them who are elderly and are or may be in need of" from section 3 of the Bill with "Pioneers" should this give the impression that the PG benefits will be means-tested. The Government does not intend to introduce means-testing to the PG Package. The intent of the Package is to honour and recognise the contributions of all Pioneers in nation-building, regardless of their financial status. As such, they receive similar special benefits, on top of healthcare subsidies which the Government already provides for all Singaporeans. Let me assure Ms Chia and Members that section 3 is an acknowledgement that our Pioneers are likely to be less well-off and be in need of greater assistance. It is meant to reflect a fact and not to signal the Government's intent to restrict Pioneer benefits to the financially needy. So, I want to make that clarification and I hope that Ms Chia would be willing to accept this clarification, which is also a matter of record in this debate.”
“Let me add, too, that, as patients, we have to be careful to avoid asserting undue pressure on doctors by seeking treatment or medication excessively. Third, Mr Ong is right to remind us that there could be unexpected or external factors that may lead to accelerated depletion of the Fund. We have, therefore, included a buffer for inflation and also taken into account utilisation due to the ageing demographics of Pioneers when sizing the Fund. But his broader point about the need to contain healthcare cost increases is an important one and there are three key strategies, as mentioned by Deputy Prime Minister Tharman during his Budget round-up speech earlier this year. First, we must rebalance the structure of our healthcare system to shift from an over-concentration of treatment in acute hospitals even when treatments can be effectively delivered through primary care or step-down care providers. Second, we must ensure that we have the right incentives for healthcare providers, doctors and individuals and we must avoid over-prescription by ensuring that treatments are clinically necessary and cost-effective. Third, all of us must take responsibility for maintaining healthy lifestyles and utilise healthcare services prudently. This is a long-term effort and we will all need to do our part to control healthcare costs. Finally, Mr Ong asked about the Appeals Panel criteria. For citizenship-related appeals, the Panel has been considering the relevant factors of each case. These factors include whether the appellant had been in Singapore in the early years of Independence, demonstrated clear efforts to sink roots in Singapore and had obtained Singapore citizenship shortly after the 1986 cut-off date.”
“This will provide additional resource support for the good work of our community organisations which directly help the vulnerable elderly. Monies in the PG Fund will be invested with the Government, which will pay a fixed return to the Fund annually. This is the same for other funds, such as the Goods and Services Tax Voucher Fund. Assoc Prof Fatimah also asked whether there is a maximum claim limit under the package. As Members are aware, there are existing rules on how much a Member can withdraw from his CPF Medisave Account or how much he can claim via MediShield Life. The same rules apply to Pioneers. However, there is no cap to the number of years a Pioneer may claim the PG Package benefits because the Government is committed to providing them to all Pioneers for as long as they live. Moving on to Mr Ong's points, he raised four main ones. First, he emphasised the need to ensure that the PG Fund is well-governed. Let me assure Members that the Fund is subject to the same stringent governance structure already in place for other similar funds. It will be audited annually and its financial statement will be presented to Parliament every year. Second, Mr Ong highlighted the concern of indiscriminate pricing of medicine and treatments by healthcare providers, especially where there are subsidies which are very Page: 58 attractive. Madam, I believe that the vast majority of doctors are conscientious and take it upon themselves to always act in the best interests of their patients. Nonetheless, MOH closely monitors the claims submitted by the CHAS GPs and will not hesitate to call on clinics to account for exceptional claims.”
“We have also reached out to our nursing home providers to inform them how to facilitate their patients' applications for PioneerDAS. And when MediShield Life is implemented, they will also receive special subsidies for Pioneers and have insurance coverage in case they are hospitalised. Page: 57 Assoc Prof Fatimah is right to point out that Pioneer benefits do not apply to all clinics and settings and has asked whether we need to clearly define the term "healthcare provider" under section 2 of the Bill. The list of healthcare providers that disperse Pioneer Generation benefits will be gazetted under section 19 of the Bill. We also intend to put up this list of healthcare providers online so that members of the public can check against this list. The important point is how Pioneers can more easily identify the healthcare providers where Pioneer benefits are available. In this regard, I am pleased to share with Members that, in fact, the CHAS GPs and subsidised SOCs have all been provided collaterals, such as standees, and encouraged to display these collaterals prominently so that Pioneers can see clearly that benefits are available to them. I think something visual, big and prominently located is easier for the Pioneers to identify. So, that is what we will continue to encourage the healthcare providers to do. The PG Fund has been sized so that it is sufficient to cover the projected costs of the entire package. So, there is really no need for individuals and organisations to donate to the Fund. We encourage them instead to donate directly to charities or platforms, such as the SG50 Care and Share Movement. The impact of the donations will be doubled with the matching grants from the Government.”
“Mdm Speaker, I thank the Members, Assoc Prof Fatimah Lateef, Mr David Ong and Ms Chia Yong Yong, for their support of the Pioneer Generation Fund Bill. As I speak, I am trying to look through my reading glasses. I am beginning to experience what it is like to cope with seniority. So, what Ms Chia, in particular, says about the challenges that our seniors, our Pioneers faced, I cannot say I relate to completely but I am beginning to experience it and it resonates with me. I would like, Mdm Speaker, to respond to each of the Members' points. In order to organise this, I will respond to Assoc Prof Fatimah's points first, then Mr David Ong's and Ms Chia's, if that is permitted. So, let me start with Assoc Prof Fatimah who had a question on how certain groups of Pioneers, such as those who are currently incarcerated or those who are in nursing homes, can benefit from the Pioneer Generation benefits. Pioneers who are incarcerated already receive medical care provided by the Singapore Prison Service and, so, do not require subsidies for outpatient treatment while in prison. However, they will still receive the Medisave top-ups and receive premium subsidies for MediShield Life when it is implemented. Pioneers in nursing homes are eligible for the same benefits as all other Pioneers, on top of the Government subsidies that they may receive for long-term care. Like other Pioneers, they can get the Medisave top-ups and the subsidies for outpatient treatment, which are useful if and when they are referred to the specialist outpatient clinics for treatment. Those with moderate to severe functional disability will benefit from the Pioneer Generation Disability Assistance Scheme (PioneerDAS), which I introduced earlier, which can be used to support the cost of long-term care.”
“Well, she interpreted it to me and said that it is like the Government is treating them as though they are valuable gems of the country, of the nation, and they really feel appreciated. Madam, this Bill reflects the honour and privilege we accord our Pioneers, the generation that built Singapore. They more than deserve this. Thank you very much and I Page: 49 support the Bill. 3.18 pm”
“Many of these issues can, I feel, be sorted out with better communication and use of clear signages and explanations at the clinics. I would appreciate the Ministry's inputs as well on this. Also, Madam, such a package requires sustainable, impactful communications to educate the Pioneers and their families. I have to congratulate the Government on the many initiatives that have been put forth for this. One group of personnel though that I feel we can strengthen and align better with will be our frontline counter staff at Specialist Outpatient Clinics, GPs and dental clinic assistants. These are the people who will be our "ambassadors of the Pioneer Generation Package". The interaction that they have with the Pioneers will colour the perceptions of the Pioneers about the package. Therefore, we need to update and brief these personnel so that they have a very good and in-depth understanding of the utilisation processes. I have actually encountered several elderly who have developed a negative view of this extremely good package, which is really unfair, because they were told by some of these frontline staff to go back and forth, to go back to their GPs, for example, to get assessments done for disability claims and so on and so forth. If we can simplify it for them and do it under one roof, that would certainly make it easier for our Pioneers. Indeed, simplification and streamlining processes for the Pioneers will have the positive impact that is intended. As one of the Pioneer Generation residents in my constituency told me, she really felt that this package made her feel the real meaning of 家有一老, 如有一宝, which essentially means if you have a Pioneer or a senior in your home, it is really like having a valuable gem at home.”
“For outpatient claims and other claims, how will the Ministry regulate this? Will there be some maximum claimable limit set, for example, annually, or will it be on a case-by-case consideration? This is not really very clearly defined and outlined and, in my interaction with the community and in the many dialogue sessions we have had, many Pioneers and their families have been asking for some clarity on this as well. Next, for Pioneers who are in detention, for example, in prisons and also being incarcerated long term, how are they able to utilise their PG card and Pioneer status subsidies? Some family members have been asking for clarification on this as well. How about those who have been institutionalised, such as the Pioneers in nursing homes and old folks homes? How do their families practicalise their claims and utilisation? Madam, whilst the majority of our Pioneers are delighted and happy and they welcome the package, how do we reduce misuse? I hesitate to use the term "abuse" as I feel these Page: 48 cases are really unintentional and result more from a misinterpretation of information or the lack of information. I have had some feedback from dental clinics. For example, some Pioneers had gone down to get their dentures done and were apprised of the cost by their dentist and even paid some of the downpayment as well. The mould had been prepared but they defaulted and then they came back to ask for reimbursements which created some misunderstanding and some problem as well with the clinic. This, of course, adds to the costs of dental practice, as we understand, not forgetting also taking up the time of AIC and MOH staff to follow up and investigate as well.”
“It is, indeed, a generous move on the part of the Government. A central focus of this Fund is the various healthcare subsidies and assisted payment plans, without means testing. This is appropriate for the thrust of this Bill and the Fund because, when surveyed, our seniors and Pioneers have voiced rising healthcare costs and the ability to pay for their medical management and treatment as two of their top concerns and challenges. A clarification, Madam: the term "healthcare provider" under clause 2 is defined as "any organisation providing one or more health services in the course of business". Can I ask if we should consider defining this with greater clarity or specifics? This is because the PG card, for example, can only be utilised in Government restructured hospitals as well as private entities, such as GP and dental clinics with the CHAS logo. The benefits and subsidies are not applicable when the Pioneers seek treatment at a private healthcare institution or healthcare provider. This can be critical, as leaving the definition generic and non-specific can lead to misinterpretations and confusion with consumer as well as Pioneer utilisation decisions. Of course, there are mentions in the Bill of public schemes and public authorities, but I feel that it should be a bit clearer. Pertaining to the Fund and its funding: the Government has provided the seed funding for this and will monitor and regulate the funds. Can the Minister outline what other sources of income, donations, support and fund-raising can be utilised to augment this fund? Also, for interested parties, donors and sponsors, how do they go about doing this? Another clarification with regard to clause 16: many of the disbursed funds will be through portals like Medisave, MediShield Life.”
“The Panel may determine a citizen of Singapore to be a Pioneer provided that the person is born on or before 31 December 1949. As stated in Parliament on 8 September 2014, it was recognised, after extensive deliberation, that for any age criterion, there will be those who marginally fall short of the criterion. The Panel thus decided that it was not feasible or fair to allow age-related appeals without extending the new age criterion to all Singaporeans. This is why the Bill provided that the Appeals Panel will only be looking at citizenship-related appeals. Parts IV and V of the Bill contain general provisions, including the power to make regulations for carrying out the purposes and provisions of the Pioneer Generation Fund Bill and the proper conduct of officers and entities exercising functions under the Bill. Any decisions of the Appeals Panel made prior to the passing of the Bill are also taken as valid, so that the Panel could grant Pioneer status to those who have successfully appealed earlier. Madam, the purpose of the Pioneer Generation Package is to recognise our Pioneers' contributions in developing Singapore. As Prime Minister Lee Hsien Loong has said, it is "a special package for a special generation" who have built up Singapore to what it is today. The Package reduces the medical expenses of Pioneers, enables them to save more for their other needs and thus helps their family members as well. Mdm Speaker, I beg to move. [(proc text) Question proposed. (proc text)] 3.11 pm Assoc Prof Fatimah Lateef (Marine Parade): Madam, this Bill is one that provides reassurance for our Pioneers, of our commitment to care for them, no matter what our future economic or fiscal outcomes are. It also provides for peace of mind for themselves Page: 47 and their families.”