Lawrence Wong
Singapore
“Sir, we will provide more information. I see the value of getting Ministries to put out more information, to share more about how their resources are being used and what outcomes they have achieved.”
“Sir, I agree fully with Mr Azhar that human capacity, human capital is critical. In fact, I would say the long-term potential of Singapore, how far we go really depends on us being able to maximise our human potential. That is key and that is why we have long invested in education. And it is not just about the investments.”
“Sir, we have been maintaining that commitment of 1% for some time now. I do not think it is about saying that we just have to do more and spend more. As many have highlighted, we want to ensure good outcomes from our R&D spending as well. So, we will continue if the outcomes are good.”
“This has never been the case. Temasek, when it started, was always very clear about its mandate from the very beginning – commercial, not doing national service, focused on commercial outcomes.”
“Sir, the MOF economists when they look at fiscal projections use Government's forecast of the economy, which is also published. We would typically use the mid-point of the range and then, of course, because these are in nominal terms, you have to factor for that. And the projections are done on those basis.”
“Sir, I was relieved that Mr Loh said he only has one question, but he asked the most difficult question. To answer the question, we will continue to monitor cost of living across all segments of society.”
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“All Housing and Development Board (HDB) buildings are designed to meet the prevailing Fire Code requirements. For HDB residential blocks, each residential unit is designed to be a fire compartment, to prevent the spread of fire to adjacent units. In addition, various measures have been put in place to ensure the fire safety of HDB flats. These include the provision of fire-rated entrance doors, fire-resistant walls and floors, and installing dry/wet rising mains and fire lifts, where required, to facilitate firefighting. Under the Fire Code, manual fire alarm systems are not required for standalone residential blocks, be it HDB or private. The Fire Code requires each residential unit to be designed as a fire compartment, and so any outbreak of fire is limited to that affected unit. Hence, there is generally no need for an entire block to evacuate in the event of a fire. However, for all buildings where residential uses are mixed with other uses, such as commercial, social-communal and car park use, fire alarm systems will be installed as and when required by the Fire Code.”
“The key consideration in the pricing of Housing and Development Board (HDB) flats is to keep public housing affordable. That is why new HDB flats are priced substantially below the prices of comparable resale flats. In particular, the average monthly instalment to income ratio for first-timer families buying new flats in non-mature estates is less than a quarter of applicants’ monthly income. This means that home buyers will require little or no cash outlay. The selling prices set by HDB for new flats cannot cover their development costs, which include construction and land costs. That is why HDB incurs significant deficits every year in its home ownership programme. On top of the subsidised selling price, HDB also provides housing grants of up to $80,000 to give more help to lower- and middle-income families buying their first home.”
“By doing so, we create a GST system that is progressive, that effectively has lower tax rates for the lower-income while those with the highest means pay at the full rate. Besides luxury items, Dr Intan Mokhtar also proposed higher consumption tax rates for alcoholic beverages and tobacco products. We are mindful of the negative externalities arising from the consumption of such products, as the Member has highlighted and, in fact, these are already taken into account by way of excise duties. And so, these duties are reviewed regularly and updated from time to time. Mr Deputy Speaker, I hope I have addressed the questions and comments raised by the Members. I would thus like to reassure everyone that MOF will continue to review our tax regime regularly to ensure its relevance and effectiveness in the digital economy. Thank you, Mr Deputy 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. – [Mr Lawrence Wong.] (proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]”
“There are already many programmes under the Infocomm Media Development Authority (IMDA) which provide lower-income households with subsidised broadband and devices and access to the Internet. In addition, the Silver Infocomm Initiative offers affordable IT classes to equip seniors with relevant basic digital skills. And, of course, Singaporeans can use their SkillsFuture Credit to offset course fees, including digital courses offered by online platforms. Finally, Dr Intan Mokhtar proposed introducing differential and higher GST rates on luxury items, as well as items like alcoholic beverages and tobacco products. I understand Dr Intan’s intent. This is not a new suggestion. We have debated this in the House every time we have a Budget and when we talk about the GST regime. Basically, we agree fully with the objective of having an overall tax and transfer system that is progressive, one where we give more help to those who have less. I think all of us share fully that intent. But we have also seen the experience of other countries with a multi-tiered GST system which introduces immense complexities in trying to define what are regarded as basic essentials and what are to be treated as luxury goods. In some jurisdictions, attempts at classification have resulted in bizarre outcomes, endless disputes and loopholes that may very well be exploited and end up being counter-productive. So, Singapore’s adoption of a broad-based, single-rate GST regime, coupled with the permanent GSTV Scheme, is a more equitable approach in creating a fair and progressive tax system. We have a broad-based single rate GST, but we couple that with a permanent GSTV which provides targeted transfers and help at the lower-income and retiree households.”
“Most jurisdictions have in place an import relief threshold for imports of goods via air and post. Imported goods below this threshold will not be subject to GST, so as to facilitate clearance at the border, and to ease administrative costs. In Singapore, I am sure Members are aware, this threshold stands at $400. Below $400, there is no need for GST. Above that, you have to pay GST. The taxation of low-value goods is a relatively new tax development and we are monitoring international developments on this front. Australia is the first in the world to implement a Vendor Collection regime for overseas suppliers to collect GST on imported goods in July this year. Switzerland and New Zealand, and the EU have indicated plans to do so in 2019 and 2021 respectively. So, again, as we have done for imported services, we first look at what other jurisdictions have done, we study their experiences and then, we learn from these experiences to see what can be done in Singapore. That is what we are doing with regard to the GST measure for low-value imported goods. Mr Ong Teng Koon shared his concern on a "digital divide". That is, indeed, something that all of us ought to be concerned about. There are several ways we are dealing with this. First, we have in place the permanent GST Voucher (GSTV) scheme that provides annual assistance to citizens. This offsets GST expenses for many Singaporeans, especially retiree and lower-income households. We review the GSTV scheme regularly to ensure that there is adequate assistance for the lower income. Second, as Singapore becomes more connected, the Government will also do more to ensure digital inclusion and accessibility.”
“Tax is important but there are many other fundamental attributes, such as our high digital penetration, our sophisticated and tech-savvy consumers, our extensive connectivity as well as our robust IT and logistics infrastructure. So, overall, we are still in a very strong position to be a regional e-commerce hub. Mr Melvin Yong raised queries relating to the taxation of online advertising services and also asked whether consultancy and advisory services will be subject to GST under the new regime. Briefly, the scope of tax under OVR is consistent with current GST rules and how they are applied to local suppliers. So, for online advertising services, whether or not GST is applicable depends on the place of circulation of the advertisement. Under existing rules, media advertisement that is circulated substantially or wholly outside Singapore qualify for zero-rating. Likewise, if provided by overseas suppliers, such advertising services are not subject to GST. So, we are using the current GST rules and if it is zero-rated locally, then when supplied under OVR, it will not be subject to GST. By the same logic, for advertisements placed on the Internet, we regard the viewer access is generally global. Such advertisements can qualify for zero-rating and, correspondingly, will not be subject to GST under the OVR regime. For B2C consultancy or advisory services, they will be subject to GST if the services meet the definition of "digital services", that is, if the service is supplied over the Internet or other electronic network with minimal or no human intervention. Mr Henry Kwek and Mr Melvin Yong asked whether there are plans to extend the GST measures to low-value imported goods.”
“In this Bill, we have proposed heavier punishments, including custodial sentence and new offences to further strengthen prosecution and deterence of unauthorised collection of GST. This applies for both local and overseas suppliers. Ultimately, GST is a self-assessed tax. This applies even in the existing GST regime. It is the responsibility of GST-registered businesses to apply the correct GST treatment on their transactions. On the Government's part, we will continue to engage the industry to keep the GST for imported services effective, easy to comply and certain. That way, we make the GST system a resilient one in generating tax revenue to fund public services. Mr Ong Teng Koon asked how much revenue will we expect to collect from GST on imported services. We expect additional revenue of about $90 million per year. But I should also explain that it is not just about the delta in revenue collection because this move also seeks to defend our current revenue base from being eroded as more and more transactions move online. So, if we were not to do anything, potentially, the revenue base may get more and more eroded and we may be losing more revenue. So, we have to make this move now to defend our current revenue base from being eroded. Mr Ong Teng Koon made the comment that overseas businesses may decide to stop their sales to Singapore as a result of the tax measure. It may be a concern for some, but I should highlight as I said earlier that, firstly, we are not the first country to impose GST on imported services. Other jurisdictions have done so, and this is in line with the global movement towards taxation of the digital economy. Secondly, for many businesses, Singapore's appeal to businesses is not premised solely on tax alone.”
“IRAS can also use provisions in bilateral tax agreements to obtain information on overseas vendors from other tax jurisdictions. In the event of non-compliance, the existing penalty and enforcement regime under the GST Act will apply. IRAS will raise additional tax assessments, apply penalties and recover the outstanding tax payable directly or through the appointment of agents. We are not the first country to do this. So, we have learnt from the experiences of many other jurisdictions, including Australia, New Zealand and South Korea, which apply similar penalty regimes to non-resident registrants, as with domestic businesses. That said, as I highlighted earlier, many of these overseas businesses have experience meeting similar VAT/GST obligations in other jurisdictions. Many of them are familiar because we are not the first country and they have experience meeting similar GST obligations in other jurisdictions. So, we do not anticipate significant compliance issues. Experience from other jurisdictions show that these multinational businesses are likely to comply to avoid reputational damage. On Dr Intan Mokhtar's queries, not all digital services consumed in Singapore, be it B2B or B2C, are supplied by GST registered businesses. So, there are non-GST registered suppliers for such services. We do not track the number of these services. They may be small companies or even individual entrepreneurs providing such services on various online platforms. We do not track their numbers. So, Dr Intan Mokhtar asked about such non-GST registered businesses and the concern whether they may charge GST on their sales. That is, indeed, a concern. And that is why we currently impose penalties and fines on all unauthorised GST collection offences under the GST Act.”
“For example, the scope of digital services that is subject to GST as well as the definition of electronic marketplace operators under the OVR regime are generally aligned with that in other jurisdictions. Third, our rules ensure that we do not impose unnecessary GST liability on businesses. As I mentioned just now, under reverse charge for B2B imported services, we do away with the need for local businesses to account for GST on the services they import if they can already claim a full refund of GST incurred on their purchases. And we put in place a two-tier registration threshold for the OVR regime for B2C imported services, which is based on global annual turnover and sales to Singapore customers. The $1 million global turnover maintains parity with the GST registration threshold of local suppliers, while the $100,000 threshold on sales to Singapore ensures that we bring into the tax net overseas vendors with significant sales to consumers here. These features enable us to focus our enforcement of GST for imported services on these overseas vendors. This is also in line with the concern highlighted by Mr Ong Teng Koon on enforcing the system vis-a-vis the millions of suppliers worldwide. By designing the system as we have, I think it does facilitate enforcement and implementation. Mr Ong Teng Koon and Mr Melvin Yong also asked how we will enforce compliance for overseas vendors for B2C services. IRAS will make use of various information sources to identify and engage potential registrants as well as to verify the GST reporting by these businesses. Similar to domestic traders, business audits will be conducted by IRAS on a risk-based approach. We already do this for our regular GST regime. So, we will extend this for OVR as well.”
“Mr Deputy Speaker, I thank the Members of Parliament Dr Intan Mokhtar, Mr Melvin Yong, Mr Ong Teng Koon and Mr Henry Kwek for supporting the Bill and also their comments on the Bill. Let me address the questions raised by the Members in four different parts. First, on the design of GST for imported services and how the measures can be effective. Both Mr Ong Teng Koon and Mr Melvin Yong raised questions on how such a regime – GST for imported services – can be effectively implemented. So, let me highlight a few salient aspects of the design of the proposed measure that will enable us to ensure effective implementation. First, Singapore adopts, as Members are aware, a broad-based single rate GST regime with few exemptions. This provides a good foundation for businesses to comply with the new GST rules for imported services without much need to classify and ascertain the applicable GST treatment, as the same GST rate applies to most transactions. We build on this foundation by learning from the experience of other jurisdictions and consulting extensively with industry players on how rules may be formulated to impose minimal compliance burden. These include the Business Industry Advisory Committee to the Organization for Economic Cooperation and Development (OECD), the Singapore Retailers Association (SRA) and the Association of Banks in Singapore (ABS). Here, I would like to thank all stakeholders for providing us with feedback. We will continue to engage businesses as we prepare for implementation from 1 January 2020. Second, where possible, we have ensured consistency in our rules with those of other jurisdictions. This eases compliance, promotes effectiveness and provides certainty for the industry.”
“The Housing and Development Board (HDB) already provides a rent transition period to public rental tenants when their income increases. Households with monthly income below $800 pay the lowest rent tier which starts at $26 for a 1-room flat, or $44 for a 2-room flat. At tenancy renewal, HDB waives the rent increase for one tenancy term1 if the household's income crosses the $800 threshold but remains within the income ceiling of $1,500. At the subsequent tenancy renewal, even if the household’s income increases further, HDB will waive the rent increase for another tenancy term if the increase in income is low relative to the rent increase and the household remains within the income ceiling. HDB works closely with Social Service Offices to support families placed on ComCare schemes under the Ministry of Social and Family Development. For households receiving Short-to-Medium Term Assistance (SMTA), HDB will determine the rent payable based on an individual assessment of their financial situation. Those receiving ComCare Long Term Assistance will automatically qualify for the lowest rent tier.”
“Housing and Development Board (HDB) buildings are constructed using reinforced concrete in accordance with the prevailing building codes and industry norms. This ensures that our buildings are structurally safe and suitable for occupancy. While the design of HDB flats have undergone some changes and improvements over the years, such changes in design do not reduce the level of soundproofing in the flats. As part of efforts to improve overall construction productivity, since November 2014, the Building and Construction Authority (BCA) has required all residential non-landed developments to use non-concrete drywalls for internal partitions, except for wet areas, such as the bathroom and kitchen areas. The drywall systems used in Build-To-Order (BTO) developments, which comprise a metal framework enclosed with gypsum plaster panels on both sides and filled with sound insulation material, provide comparable acoustic insulation as concrete walls of similar thickness. To elaborate, the Sound Transmission Class (STC) is used to rate the acoustic performance of interior partitions. It is the decibel reduction in noise a partition can provide, with a higher STC value given for better acoustic performance. Interior walls using bricks or concrete have STC of about 40, which is considered suitable for residential units. The drywall systems used in new BTO developments since 2014 have a STC of at least 45, which is even higher. Notwithstanding the flat design or the material used, in a high-density living environment like an HDB block, it is also important that residents do their part by being considerate, such as through keeping the noise level down, especially late at night, so as to provide a pleasant living environment for all.”
“There are still around 80,000 flats built up to 1986 that are awaiting the Home Improvement Programme (HIP). We have been ramping up the pace of HIP to complete these projects and hope to complete the upgrading for these blocks by around 2021. Once we have completed this batch of HIP, we plan to start on HIP for the blocks built between 1987 and 1997, which will cover about 230,000 flats. The exact timetable for implementing HIP for the newly eligible flats will be contingent on the Government’s fiscal position and budget availability.”
“The Housing and Development Board (HDB) introduced the 2-room Flexi Scheme in November 2015. At least 40% of 2-room flexi Build-To-Order (BTO) flats in non-mature estates are set aside for the elderly aged 55 and above. The balance of up to 60% of the flat supply is divided equally between families and singles. Any quota not taken up by the elderly or families is allocated to singles. From 2015 to 2017, the proportion of applicants who were invited to book a 2-room flexi flat increased from 52% to 84%. During this period, elderly, families and non-elderly singles made up about 33%, 7% and 60% respectively of those invited to book flats. Specifically, from November 2015 when the 2-room flexi flats were introduced to end-2017, more than 5,500 non-elderly singles booked a BTO 2-room flexi flat.”
“Two-room flexi short-lease flats, and the earlier Studio Apartments (SA), are designed specifically for seniors to live out their retirement years. Before their purchase, seniors are made aware that these flats cannot be sold in the resale market. If they no longer need their flat, seniors can return the flat to HDB and receive a refund of the value of the unused portion of the lease. Under the 2-room Flexi Scheme, seniors can buy a 2-room Flexi flat on a shorter lease of 15 to 45 years, as long as the lease can cover them and their spouse up to at least age 95. For example, a couple aged 60 have to buy a flat with a lease of at least 35 years. If they prefer a longer lease, they could have a lease of 45 years, to last them till age 105. Providing this option to seniors upfront mitigates the need for subsequent lease top-ups. Seniors who own SAs, which were sold on fixed leases of 30 years, can apply to top up their lease by five, 10 or 15 years at prevailing market value, at any point in time.”
“Pet licensing primarily serves to protect public health. As dogs are the most common cause of rabies transmission from animals to humans globally, the Agri-Food and Veterinary Authority (AVA) requires them to be licensed to enable traceability for the purposes of disease control. AVA has put in place several measures to deter pet abandonment. First, AVA conducts public education initiatives to promote responsible pet ownership, including school talks and community events. Second, AVA requires pet shops to do pre-sales screenings to assess and ensure that their customers are suitable pet owners. Finally, owners who are found to have abandoned their pets may be liable to a maximum fine of $10,000 and a jail term of up to 12 months, for first-time convictions. AVA investigates all feedback on alleged pet abandonment and will take enforcement action where required. AVA will continue to work with stakeholders to review measures to promote responsible pet ownership and deter pet abandonment.”
“For the Estate Upgrading Programme (EUP), we do prioritise older estates, especially those with greater need and scope for significant improvement. We are currently coordinating with other agencies that are planning upgrading works, to minimise inconvenience to residents. We will contact the Citizens' Consultative Committees to seek nominations for the next batch of EUP estates soon.”
“The Housing and Development Board (HDB) does not have data on the number of elderly who sold their flats, used the proceeds to help their adult children buy another flat, but were eventually chased out and rendered homeless. Elderly parents whose children are not willing to support them may seek the assistance of Family Service Centres or the Office of the Commissioner for the Maintenance of Parents. If mediation is not successful, they can consider making an application for maintenance at the Tribunal for the Maintenance of Parents. For elderly parents who are unable to obtain support from their children, HDB looks into their individual circumstances and will allocate a rental flat to those who have no other housing option.”
“In situations where the subject under investigation is required to be held for a longer period, he or she may be escorted to facilities in the Police Force. Mr Deputy Speaker, let me conclude. MOF will continue to review our tax regime and our schemes regularly to ensure their relevance and effectiveness. The changes to the tax regime for PHC drivers and enhancements to IRAS' investigative powers are the results of such policy reviews. I thank the various Members who have spoken on these issues before. We have taken in their feedback, we have put in place these changes and I believe they are for the better. Mr Deputy 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. – [Mr Lawrence Wong.] (proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]”
“As I had mentioned earlier in my speech just now, the enhanced investigative powers in the amendment Bill will be exercised only by authorised IRAS officers and they will undergo training on the use and escalation of force and various other techniques that are relevant to the exercise of these enhanced investigative powers. The training programmes are similar to that received by officers of other law enforcement agencies. Mr Louis Ng asked if it is similar to that of the Police Force because I only mentioned Customs as an example just now. I would like to assure him that it is, indeed, similar to the training received by officers in the Police Force as well. As mentioned earlier, the safeguards will be legislated to ensure that these enhanced investigative powers are properly exercised. These safeguards are consistent with those applying to other law enforcement agencies. For example, the power to arrest without a warrant may only be exercised for an investigation of serious tax offences like tax evasion or where a suspect attempts to destroy evidence with a view to hindering or obstructing IRAS' investigations. In addition to these legislative safeguards, there will be clear guidelines and operational protocols on situations which allow for the exercise of these powers by authorised trained tax investigators. Together, these measures will ensure that the enhanced investigative powers are properly calibrated and only exercised when other means are found to be inappropriate. Mr Saktiandi Supaat asked about interrogation rooms and holding centres for suspects. There are already interview rooms in IRAS currently specifically catered for the questioning of suspects.”
“And as several Members have highlighted, MOM announced in this year's Committee of Supply that the Government would be implementing a "Contribute-As-You-Earn" model for self-employed persons' MediSave contributions whereby a MediSave contribution is required as and when a service fee is earned. Under this model, service buyers or intermediaries who contract with a self-employed person will deduct and transmit the MediSave contribution to the person's MediSave account whenever they pay a self-employed person. The Government, as a service buyer, will take the lead. So, we will implement the "Contribute-As-You-Earn" model, starting with a pilot by 2020. This will allow the Government to work through the implementation issues and help smoothen its subsequent implementation in the private sector. Of course, the issue is a far bigger one than just looking at the MediSave contributions alone, as many Members have highlighted. So, we will continue to look at different options, including incentives where necessary, to better ensure the retirement adequacy of Singaporeans who are self-employed. Both Mr Louis Ng and Mr Saktiandi Supaat asked some questions about IRAS' powers to investigate tax crimes. So, let me just address some of the questions they have raised. In general, investigations of tax offences are conducted by IRAS officers. In cases involving both tax evasion and other offences, such as money laundering or corruption, IRAS may engage the relevant agencies, be it CAD or the Corrupt Practices Investigation Bureau (CPIB), to conduct joint investigations.”
“The tax changes will help them on a prospective basis. But for those individuals who may have difficulties with their existing obligations, I would advise that they contact IRAS and CPF Board, and the agencies will look into having a suitable instalment plan to assist them with their obligations, be it for tax or for MediSave contributions. Mr Saktiandi Supaat also asked about the regulations in respect of PHC drivers. He asked about age limits, medical health certifications. All of these really come under the purview of MOT and the Land Transport Authority (LTA) which set the regulatory framework for PHC drivers. For example, LTA already requires all individuals to pass a medical examination before they can apply for their Private Hire Car Driver's Vocational Licence (PDVL), and I am sure these regulations will continue to be updated and reviewed by MOT and LTA. Next, Assoc Prof Walter Theseira, Mr Chen Show Mao and Mr Saktiandi Supaat highlighted the need to consider this increase in people who are self-employed in light of the gig economy, and all of the Members rightly highlighted the concern that such self-employed persons may value more their take-home pay and put in less for their longer-term needs, be it for medical needs or for their retirement. I think Assoc Prof Theseira said this is actually a broader issue for another day, and truly it is, because it is a bigger issue than the amendments that are being contemplated in this Bill. The Government is very mindful of this issue and that is why we have mandated to start with MediSave account contributions by self-employed persons to ensure that they are able to meet their basic healthcare needs.”
“The tax changes update our tax regime in view that taxi and PHC drivers now provide similar point-to-point transport services. Er Dr Lee Bee Wah asked about the difference between part-time and full-time PHC drivers and whether some of them would have difficulties apportioning their expenses correctly. Indeed, this is a reason why IRAS has taken time to listen to feedback from different stakeholders and, instead of coming up with a scheme that may be complicated and different to administer, we have decided on a tax deduction based on the deemed expense ratio set at 60% of gross driving income. This ratio is a proxy for all expenses incurred to earn driving income and it applies to both full-time and part-time drivers. So, those who drive more would claim more, while those who drive less will claim less. Nevertheless, drivers who still opt to claim tax deduction based on the actual amount of expenses incurred can do so if they wish to. And if they want to do that, they will need to keep proper records of the expenses and ensure the correct apportionment of these expenses between that incurred to earn the driving income and that for private use. But I would imagine, with this deemed expense ratio, many drivers would consider using it for their convenience and for ease of compliance. I would also like to clarify, in response to the question raised by Er Dr Lee Bee Wah, that currently, self-employed delivery persons are already allowed to claim tax deduction on expenses incurred on using motorcycles or commercial vehicles, such as vans. So, that is already claimable. Mr Saktiandi Supaat shared about examples of residents who are PHC drivers who face difficulties in paying their income tax for YA2018 as well as their MediSave contributions.”
“We extended the scheme for three years in 2018 until December 2021 as the take-up was encouraging. We want to encourage corporate giving, but we remain open to existing, new or different ways of doing so. So, let us monitor the progress of this scheme and study how best to further encourage corporate giving. Mr Louis Ng asked if the scheme could be extended to allow for the wages of sole proprietors, partners and shareholders, essentially the business owners, to be claimable. The rationale for the scheme is for our businesses to encourage their employees to contribute their skills and time to the IPCs. Therefore, the focus is on the employees. In fact, the business owners of the company already benefit from the tax deduction given to their businesses when their employees volunteer in the IPCs under this scheme. Mr Louis Ng also asked if the scheme could be extended to charities which are non-IPCs. Currently, only IPCs can issue tax-deductible receipts for qualifying donations. This is so because IPCs are subject to stricter standards in regulatory compliance and governance, compared to the non-IPC charities. We apply the same standards for BIPS as wages and related expenses associated with volunteering are also eligible for tax deductions, and we will continue to review how to make this scheme accessible and relevant to encourage corporate volunteering. So, that is on the tax deductions for qualifying donations as well as the extension of BIPS. Next, let me touch on tax deduction for motor car-related expenses for PHC drivers. As many Members mentioned just now, many of you have spoken up about the need for the tax deduction. We have taken in your feedback, reviewed this extensively and we are now making these changes.”
“Mr Deputy Speaker, I thank the hon Members Mr Chen Show Mao, Mr Louis Ng, Er Dr Lee Bee Wah, Mr Saktiandi Supaat and Assoc Prof Walter Theseira for their comments and also their support for the Bill. Let me address the questions that have been raised. First, on tax deductions for qualifying donations and extension of the Business and IPC Partnership Scheme (BIPS) which were raised by Mr Louis Ng, the 250% tax deduction for qualifying donations was extended for three years until December 2021 to continue to encourage the spirit of giving. The total tax deductible donations received by IPCs from corporate and individual donors have risen by 26% from about $687 million in 2008 to $866 million in 2016. So, this is a very encouraging trend and we hope more can continue to come forward to give. Many donors contribute out of passion and heart for the community, and it is not just because of the tax incentives. Having said that, the 250% tax deduction that we offer today is already one of the most generous tax deduction schemes worldwide. Countries like Hong Kong, America and Australia provide only 100% tax deductions for corporate and individual donations. So, we do not think it is necessary at this stage to make this tax deduction permanent. We will continue to study ways to encourage giving, taking into account the needs and maturity of the charity sector, the impact of tax deductions on donations and the tax revenue forgone. We also need to consider how the different deductions and reliefs benefit taxpayers in different income tax brackets. Unlike tax deduction for qualifying donations, BIPS is a relatively new scheme that was first piloted in the second half of 2016 to encourage businesses to support their staff to volunteer.”
“We have between 2015 and 2017, received about 1,600 appeals for waiver of EIP. So, those are the statistics I have that are available. If Mr Pritam Singh would like to ask more in-depth questions on other data, we can easily follow up in a separate Parliamentary Question.”
“Mr Speaker, I appreciate Mr Chong raising the issues that residents face. We really have to look at it case by case, because there are indeed instances where the residents have said they find it difficult. But we have seen recent transactions within that same neighbourhood where transactions have taken place. So, we really have to look at the specific location, the specific appeal, and we will, like I said, do our best to assist those cases.”
“Mr Speaker, whatever we can do, particularly where it involves putting up more information in the marketplace to better help the matching of demand and supply, is worth considering, and so whatever we can do to provide more information to facilitate a better marketplace, those are things we will certainly consider and try our best to support.”
“I thank the Member for the supplementary question. I was referring to the resale market. In the Build-To-Order (BTO) market, the prices are uniform. But in the resale market, when you make a purchase, the EIP can have an impact, just as when you make a sale decision, the EIP can have an impact. We recognise that there will be impact in the market with an EIP. This is bound to happen. So, as I said, we will continue to monitor this very carefully to make sure that while we all recognise the merits of having an EIP system, we want the housing market to also be fair to all Singaporeans at the same time, and not to affect any particular group disproportionately. So, we will continue to monitor the system, make sure it works well, achieves the goals that we want it to achieve, and, where possible, continue to exercise flexibility in the way we administer the scheme.”
“Mr Speaker, in relation to the impact that EIP has on the market, we really have to look at it on both sides, both the purchase and the sale transaction. In some instances, on the purchase side, it may help the buyer because the price may well be slightly lower; and on the flip side, of course, on the sales side, it sometimes may be more difficult. So, it really depends on the circumstance and on the nature of the transaction and for that particular location, which are the binding EIP limits. So, it can vary. We put out data, information as far as possible to help facilitate the matching of demand and supply in the marketplace, and I think that is the right approach. But as I said earlier, we do monitor the situation carefully. We will extend assistance to those who need more time and we will continue to exercise flexibility for those who are in extenuating circumstances.”
“The Ethnic Integration Policy (EIP) was introduced in 1989 to ensure a balanced mix of ethnic groups living in Housing and Development Board (HDB) estates, so as to promote racial harmony and strengthen social cohesion. It applies to the sale and purchase of all new and resale HDB flats and is implemented for all ethnic groups. The saleability of a flat in the open market is dependent on many factors and not just the EIP. While home owners may have their own expectations of how much their flat can sell for, flat attributes like location, storey height, physical condition of the flat, remaining lease and market sentiments would naturally be considered by prospective home buyers. To help home owners and buyers make an informed decision in their price negotiation, HDB provides daily updates of transacted prices of resale prices at the HDB InfoWEB. For those who are unable to sell their flats, HDB may grant them an extension of time and advise them to be realistic with their asking prices. HDB will continue to exercise flexibility for households with exceptional circumstances. The EIP is an important policy that is applied to all ethnic groups consistently. There are no plans to buy back flats from flat owners who claim that they are unable to sell their flats due to EIP.”
“Mr Speaker, with your permission, I would like to take Question Nos 6 and 7 together.”
“Over the past 10 years from 2008-2017, seven Place of Worship (PW) sites were launched and successfully awarded. In June 2012, the Urban Redevelopment Authority (URA) relaxed the allowable Gross Plot Ratio (GPR) and storey height controls for PW developments. This has allowed for intensification of some PW sites, subject to local site conditions, and whether the proposed intensification would adversely affect surrounding uses. In September 2018, the Ministry of National Development (MND) announced the revised tender process for PW sites to ensure that only religious groups that actively contribute to the community and have a genuine need for worship space are allowed to bid. Under the revised framework, MND will also be releasing land for PW hubs, which can house multiple religious organisations belonging to the same religion, in a multi-storey development. Smaller religious organisations which find the standard PW sites too large for their own use can band together under one PW hub. Through co-location and sharing of facilities, such as car parks, Singapore’s limited land resources will be better optimised.”
“The property cooling measures implemented on 6 July 2018 are intended to moderate the residential property market cycle and keep price increases in line with economic fundamentals. Loan-to-Value (LTV) limits were tightened across all housing loans, including those taken by first-time buyers, as the price increases prior to the measures were broad-based across the market, reflecting demand from all types of buyers. However, we maintained the Additional Buyer's Stamp Duty (ABSD) rates for Singapore Citizens and Permanent Residents buying their first residential property. As the measures were only introduced recently, it is premature to conclude whether they have been effective. Nevertheless, there are early signs that the measures may have kept the pace of price increase in check. Based on the Urban Redevelopment Authority's (URA's) latest flash estimate of the Property Price Index, prices increased by 0.5% in the third quarter of 2018, compared to 3.9% and 3.4% in the first and second quarters of 2018 respectively. The Government will continue to monitor trends in the property market and adjust our policies as necessary, to maintain a stable and sustainable property market.”
“Residents are responsible for regular maintenance of the windows to ensure that they are safe and secure at all times. Most residents install custom-made windows based on their preference, and these are of varying sizes, colours, different configurations and designs. It would thus be best to leave the replacement of these windows to flat owners. External air-conditioner ledges were provided in Housing and Development Board (HDB) flats from the early 1990s onwards. For flats without air-conditioner ledges, the Building Control Regulations stipulate that residents need to install stainless steel brackets to support any external air-conditioning units. This is to ensure public safety. There is, therefore, no need to provide air-conditioner ledges under the Home Improvement Programme (HIP). As at 31 August 2018, about 90,000 households have been billed for the HIP. Of the households billed, 11.5% of households have opted for deferred payment and 88.5% of households have made full payment. Amongst those who made full payment, about half of them paid by cash. The status of flats undergoing upgrading programmes, such as HIP, is published on the HDB InfoWeb. Prospective flat buyers can, therefore, check the status of the flat they are interested in. Upon ascertaining that the flat is undergoing HIP, they would need to check with the sellers on the HIP components, that is, Essential/Optional that the sellers have opted for and factor these into their price negotiation with the sellers before committing to the purchase.”
“The financial forfeiture for cancellation ensures that flat applicants are committed to their purchase. This is necessary as the Housing and Development Board (HDB) sets aside flats for successful applicants and has to turn away other applicants as a result. The forfeiture also covers the holding and administrative costs incurred by HDB as a result of the flat cancellation. Flat buyers who cancel their application after signing the Agreement For Lease but before key collection will receive a partial refund of the downpayment made for the flat, if the downpayment was more than 5% of the flat price. As for flat buyers who return their flat to HDB after they have collected their keys, they may receive substantial compensation of up to 95% of the flat price. In cases where the cancellation of the flat purchase is due to a change in family nucleus, for instance, due to divorce, HDB can allow one of the parties to retain the flat by including another eligible person into their flat application, subject to the outgoing party's consent. There is no financial forfeiture involved for such cases. If they are unable to retain the flat, HDB will look into their individual circumstances and can exercise flexibility if they have extenuating circumstances, such as financial hardship.”
“In 2017, the Housing and Development Board (HDB) received 3,493 instances of feedback regarding disputes between neighbours. Of these, 216 instances, or about 6%, were related to smoking. It is natural that disagreements arise between neighbours from time-to-time and, in general, it is best for such disputes to be settled informally between the parties involved. Where mediation is required, residents can approach the Community Mediation Centre (CMC), which provides trained neutral parties to help neighbours arrive at mutually acceptable solutions. In 2017, 24 cases involving disputes arising from cigarette smoke were registered with CMC, of which two proceeded to mediation. Both cases were successfully mediated. For intractable cases where parties are unable to resolve their disputes, aggrieved parties can file a case with the Community Disputes Resolutions Tribunals (CDRT) as a last resort. The CDRT judge can order parties to attend mandatory mediation in the Courts or at the CMC, to attend counselling, or to fix the case for hearing by the Courts. There were no cases pertaining to cigarette smoke filed with CDRT in 2017.”
“As part of its food safety regime, the Agri-Food and Veterinary Authority (AVA) regularly inspects and conducts sampling of imported fruits to ensure that they comply with our standards and requirements. Imported fruits that fail AVA’s food safety inspections will not be allowed for sale. Following the reports of needles found in Australian strawberries, AVA has been in close communication with the Australian authorities, which have implemented additional export control measures. From 19 September 2018, exporters have been required to provide assurance, such as evidence of metal detector or x-ray screening, to Australian authorities that their consignments of fresh strawberries are free from metal contaminants prior to export. AVA will continue to closely monitor the situation and take action where necessary.”
“The purchase of a flat is a long-term financial commitment. Hence, it is important for flat buyers to have steady employment to ensure that they are financially able to service the housing loan and sustain ownership of the flat over the long term. The Housing and Development Board (HDB) provides the Additional CPF Housing Grant (AHG) and the Special CPF Housing Grant (SHG) to help low- to middle-income households buy their first homes. To assess the household's income fairly, we require at least one applicant to have worked continuously for at least 12 months prior to the flat application and remain working at the point of flat application. A person who is unfit for work due to disability may apply for the grants with eligible family members, or other eligible singles under the Joint Singles Scheme. For cases where a person is unfit for work due to a disability and would like to buy a flat under the Single Singapore Citizen Scheme with the help of grants, he/she may approach HDB for assistance. HDB will assess such requests, taking into account whether the appellants are able to produce a medical certification that they are unfit for work due to illness or disability and whether they are able to sustain the flat purchase over the long term without employment.”
“This year, BCA has conducted more than 250 inspections of amusement rides in Singapore as of August 2018. We will continue to work closely with the industry to ensure that amusement rides are designed, maintained and operated according to prescribed safety standards. Ride users can also play a part in creating a safe and fun experience for themselves and their families by adhering to the safety guidelines.”
“Since 2013, there have been 17 reported incidents on amusement rides involving children under the age of 12 which required medical treatment beyond basic first aid. Of the 17 incidents, 16 were due to user behaviour, and only one case in 2014 was due to a safety lapse on the ride operator's part. The Building and Construction Authority (BCA), which regulates amusement rides in Singapore, took enforcement action against the ride operator, and the safety lapse was rectified before the ride was reopened to the public. Under the Amusement Rides Safety Act, amusement rides have to be designed, maintained and operated according to internationally recognised safety codes and standards. Rides that are low-powered or battery-operated, including rides in playgrounds, are excluded from the regulatory framework, as they pose relatively lower risk. The ride operator is responsible for the safety of amusement ride operations. Amongst other measures, the operator is required to appoint a Ride Manager to manage and supervise the daily operations and routine maintenance of the ride. For example, the Ride Manager needs to ensure that a thorough inspection is done before the ride is opened for public use each day, and that only trained persons operate the ride. Some rides have restrictions, for instance, that patrons must be above a specified height, or within a specified weight. This is due to the design of the ride seats and safety restraints. Operators are required to inform patrons if rides have such restrictions, and to conduct checks to ensure compliance. BCA also conducts inspections on the operation and maintenance of amusement rides. If safety issues are detected, BCA will take action as required, such as suspending the operations of the ride.”
“New flat buyers who wish to take up a Housing and Development Board (HDB) housing loan are required to apply for an HDB Loan Eligibility (HLE) letter before they book a flat. The HLE letter provides them with useful information for financial planning, such as the loan amount, interest rate, repayment period and monthly instalment payable. During the flat booking appointment, HDB conducts financial counselling to help home buyers understand the costs involved in their flat purchase, the different financing options, for instance, how they can finance the flat by using their Central Provident Fund (CPF) savings, housing loan and/or cash, and the implications of these options. HDB will continue to remind home seekers to exercise financial prudence and buy a flat within their budget.”
“As part of its food safety regime, the Agri-Food and Veterinary Authority (AVA) inspects and takes samples from imported fruits, including durians, to ensure that they comply with our standards and requirements. Samples are tested for the presence of pesticide residues and other non-permitted chemicals. Imported fruits that fail AVA's inspection and food safety tests will not be allowed for sale. Over the past three years, all the durian samples tested have met our food safety standards.”
“As of mid-July 2018, there were 339 applicants on the waitlist for the 845 public heavy vehicle parking (HVP) spaces in and around Nee Soon. The waiting time will vary depending on how many drivers give up their parking spaces, the length of the waitlist, and the number of spaces for each parking lot. Besides the public HVP spaces, applicants can also take up private HVP spaces in the area, where there are vacancies available. On a nationwide basis, as of mid-July 2018, the 42,372 HVP spaces far exceeded the 33,500 heavy vehicles registered with the Land Transport Authority (LTA). All registered heavy vehicles are required to have a designated overnight HVP space. Those who prefer to remain on the waiting list for public HVP spaces should continue to park at their designated parking lot or explore alternative spaces via LTA's one-motoring website. Business owners should also work out the appropriate transport options for their HVP drivers to commute to and from work. While HVP drivers would like to park near their homes, we have also received feedback from local residents about noise and safety concerns arising from the heavy vehicle traffic. Land near residential areas is also needed for housing and community needs. It is, therefore, difficult to continue meeting the demand for HVP spaces in residential areas. Instead, if and when existing public HVP spaces in residential areas are phased out due to development plans, we will introduce HVP spaces in industrial sites sold through the Government Land Sales programme near the area, where possible.”
“Mr Speaker, I thank Mr Singh for these suggestions. HDB, indeed, continues to take in feedback, suggestions and do its own research to see how upgrading can be done better, and we will be happy to study these suggestions that Mr Singh has highlighted.”
“I suppose Miss Cheng is asking in the context of a Lease Buyback situation, assuming that the resident is staying there at that point in time, then, obviously the resident should have a say in any upgrading or VERS decision.”
“Mr Speaker, if I understand correctly, what Miss Cheng is asking, assuming that the flat has already been subject to Lease Buyback, and the residual lease is now with the Government, if HDB is indeed owning the flat at that point in time, then obviously the voting rights will reside with HDB.”
“On Mr Saktiandi Supaat's question on safety, we have various regulatory and inspection regimes to ensure that our HDB buildings are structurally safe, both during and after construction. This includes the Periodic Structural Inspection (PSI) regime that ensures that buildings are regularly checked for structural defects. For residential buildings, the PSI requires that the inspection be carried out every 10 years. That is a nationwide requirement. For older HDB blocks, HDB, in fact, adopts a more stringent inspection cycle of five years. We will ensure that such regimes remain in place throughout the lifespan of our HDB flats and will also continue to review our policies and benchmarks against other high-rise high-density cities.”
“Mr Speaker, the Home Improvement Programme II (HIP II) is a second round of upgrading for our Housing and Development Board (HDB) flats at around the 60th- to 70th-year mark to keep the flats safe and liveable up to the end of their lease. This will be launched in about 10 years’ time. HIP II will be focused on common maintenance issues which occur in ageing flats. We will need to study the specific scope of works, including taking into consideration the condition of our older flats closer to the launch of HIP II. As HIP II will be a huge financial commitment for the Government, we will also need to see how to pace the works to take into account fiscal sustainability and the capacity of our construction industry. Mr Saktiandi Supaat asked whether older rental flats are eligible for HIP I and HIP II. HDB has, in fact, upgraded older rental flats, including under HIP I, so we will similarly upgrade them under HIP II. Mr Chong Kee Hiong highlighted the need to minimise unnecessary expenditure between HIP II and the Voluntary Early Redevelopment Scheme (VERS). I agree fully with him. The details of these programmes will need to be worked out, including when we offer HIP II and when the flats are subsequently staged for VERS and redevelopment. We will ensure that there is no wastage of public monies in planning the two programmes. As for the technical details of valuation and acquisition pricing for VERS, we will need to study this in detail and ensure that we implement VERS in a way that is fiscally sustainable over the long term. In fact, we had discussions on this at the last Parliament Sitting.”
“Mr Speaker, I would like to take Question Nos 10 and 11 with your permission, please.”