Lim Hwee Hua
Singapore
“Mr Chairman, Sir, I believe the Minister for Finance has actually addressed that quite adequately in the Budget Statement. I will encourage the Member to read the Hansard. As I recall, he did say that our projections for revenue have been made for the next five years and we do not target a particular source of revenue.”
“Mr Speaker, Sir, I would encourage the Member to file a question for MCYS, if she would like to discuss safeguards further. What I would comment here is that at the outset when we conceived the whole Integrated Resorts idea, there were many business risks: whether it is country risk or the timing of the business cycle and so on.”
“Mr Speaker, Sir, the supplementary questions raised by Ms Denise Phua have actually been debated to some detail under the different heads, in terms of the intended strategy – why we are having Integrated Resorts and casinos in the first place. This has been debated quite extensively by the Ministry of Trade and Industry.”
“Madam, I take the Member's point about the need for checks to be done professionally, and indeed this is the case, and that is why the officers would be sufficiently trained to conduct these checks in a professional manner.”
“The proposed amendments are necessary in order to effect the new financing framework, to allow for greater contestability to be injected into the RTS industry, as well as to ensure security and continuity of the RTS operations. Madam, I beg to move. Question proposed. 4.28 pm”
“Because of the complexity of the issues and the need for us to continue consulting other players who have already been operating in that space, as well as consulting the business community in greater detail, the study would take the better part of this year. OUTCOME OF 50PLUS EXPO 6.”
The complete record
Every one of 805 lines we hold for Lim Hwee Hua, in date order, each linked to its source. Free to read, in full, without an account. Page 6 of 17.
“Mr Singh has commented on the importance of R&D and innovation. Indeed, the public sector would be more active both in adopting innovation in providing better public service and helping to catalyse private sector innovation. As mentioned in the Budget, a new Public Service Innovation Framework enhances previous efforts to bring about breakthrough public services. The emphasis would be on experimentation and innovation with the recognition that many creative ideas can come from small and nimble companies besides the large firms. Mr Singh has also commented on the ideal Chief Innovation Officer. The post of Chief Innovation Officer is currently being filled by senior officials within Ministries who have ample policy experience and who have a broad view of Government's operations that transcend Ministry or agency lines. Many are Deputy Secretaries. I believe they are well qualified and well placed to facilitate the development of more innovative public services. Within the Public Service Innovation Framework, other stakeholders such as the industry development agencies, the research institutes, and of course the private sector companies themselves will provide valuable perspectives on market trends and technology directions. Next, Madam, on e-services. Putting public services online can provide greater convenience to our customers. Customers can then transact with the Government 24/7 and on the go, without having to visit Government counters in person. According to the e-Government Customer Perception Survey, which was carried out last year, nine out of 10 customers had transacted with the public sector electronically at least once. Of these, 93% were pleased enough with the experience to recommend others to transact with the public sector by electronic means.”
“For example, MFA has established new missions in regions such as the Middle-East, whilst CAAS has added the Budget Terminal and T3 to their operations at Changi Airport. 6.15 pm But there is a limit to how much more we can pare down manpower in the public service. In view of the growing needs of the economy and the population, as well as increasingly complex issues that the service has to deal with, MOF has reviewed the MMF framework. Ministries and statutory boards will now be allowed to grow their manpower but in line with the overall growth rate of the resident labour force. The specific cost increases that Mr Singh has cited are due to the following reasons, but should he require more details, I would encourage him to file the necessary Questions. As a matter of course, the Elections Department annually sets aside sufficient funds to hold a General Election as it is the Prime Minister's prerogative to call for one at any time. At the revised estimates stage last year, the Elections Department may have assessed that the likelihood of an election being called was low, and reduced its revised estimates accordingly. The main increase in MEWR's projected costs was due to the ongoing demolition of the 33 pumping stations and the reinstatement of land occupied by these stations. The increase in the Ministry of Health's bill for supplies and services is largely due to new initiatives to enhance healthcare manpower capabilities, hardware and software to improve clinical outcomes which are consistent with the objectives that the Minister for Health has just elaborated on earlier. Madam, efficiency and productivity alone is not enough. The public sector has to innovate and find creative and better ways to deliver quality service to its customers.”
“It is done in the usual open and transparent manner, with no advantage given at all to any company, and regardless of whether the Government is a shareholder. Mr Singh has asked if Government has tended to choose the cheapest tenderer in its outsourcing. Let me assure Mr Singh that the Government is mindful not to turn Best Sourcing into cheap sourcing. In fact, for the record, about a third of all Government tenders last year were not awarded to the lowest bidders. Since FY2004, 70% of the non-core functions that were considered for Best Sourcing have been outsourced, resulting in total contracts worth $2.1 billion. The remaining 30% continued to be done in-house after market testing. The profile of officers affected by outsourcing varied. For example, in the outsourcing of car-park enforcement by URA, mostly junior level positions were affected. For the outsourcing of Government chalet operations, those affected included Division 1 positions. Madam, I would like to assure Mr Singh that productivity gains were achieved through outsourcing of non-strategic functions. For instance, the outsourcing of carpark enforcement by URA and HDB has resulted in annual savings of about $3.8 million, while ensuring the performance of the service provider remains satisfactory and desired outcomes are achieved. Internal restructuring has also led to productivity gains. One such example is the setting up of Vital.org to provide shared services for 38 public sector agencies. This has resulted in manpower savings of 33 headcount or annual cost savings of $1 million since FY2006. The somewhat small reduction number belies the actual achievement. It does not take into account the increased workload and new functions that our agencies have been undertaking.”
“Madam, let me first thank hon. Members for their comments and suggestions. The issues they have raised fall under the following five broad categories: (1) Public sector performance and accountability; (2) GIC & Temasek; (3) Statutory boards; (4) Taxation; and (5) Budgeting for national resilience. Madam, our public sector continues to be rated highly for efficiency and trust. We were recently ranked second in the world, after Denmark, for government effectiveness by the World Bank, and our public sector expertise is highly sought-after by other countries. We have managed this while keeping our public sector small, compared to other developed countries, through various measures. Mr Inderjit Singh and Mdm Ho Geok Choo have asked whether one of our measures, ie, the Manpower Management Framework (MMF), is cost-effective and whether the manpower cuts are merely passed on to the statutory boards or to the private sector through outsourcing. The MMF is imposed on a Ministry Group basis, ie, Ministry-HQ, Departments and statutory boards. There is no headcount reduction at the public sector level if the staff were merely moved from the Ministry-HQ to its statutory board. The public sector achieved a reduction of almost 4,000 officers or 5%, between the years FY2004 and FY2006. This excluded manpower cuts due to corporatisation. The reduction was achieved through, firstly, outsourcing of non-core functions only when market-testing indicated better value for money and, secondly, from internal restructuring through job redesign and process streamlining. Outsourcing accounts for about a third of the 4,000-odd headcount reduction. There was also natural attrition through resignations and retirement. Tenders and quotations are called for outsourcing projects.”
“Mr Speaker, Sir, I beg to move, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$3,913,600", "$177,000", "$4,700", "$3,547,700", "$1,282,400" and "$74,400" in the second column and substituting for them the figures "$3,717,500", "$312,000", "$3,600", "$4,040,000", "$1,414,000" and "$89,000" respectively. I propose a provision of $4,033,100 for Class I expenditure which is a reduction of $62,200 over the FY 2007 expenditure. This is mainly due to a decrease in the Privy Purse. For Class II expenditure, I propose a provision of $4,040,000. This is an increase of $492,300 over the FY 2007 expenditure due to higher payment of staff's salaries and other staff-related expenses. For Class III expenditure, I propose a provision of $1,414,000 or an increase of $131,600 over the FY 2007 expenditure and for Class IV expenditure, a provision of $89,000 or an increase of $14,600 over the FY 2007 expenditure. The higher provisions are mostly due to the development and maintenance of a new computer system. It is therefore necessary to vary the provisions in the Schedule to the Civil List and Pension Act (Chapter 44), as indicated in the motion before the House. Sir, I beg to move. Question put, and agreed to. Resolved, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$3,913,600", "$177,000", "$4,700", "$3,547,700", "$1,282,400" and "$74,400" in the second column and substituting for them the figures "$3,717,500", "$312,000", "$3,600", "$4,040,000", "$1,414,000" and "$89,000" respectively. Column No : 365 Column No : 365 ANNUAL BUDGET STATEMENT 3.30 pm”
“WRITTEN ANSWER TO QUESTION FOR ORAL ANSWER NOT ANSWERED BY 3.00 PM PROBLEM GAMBLING COUNSELLING AT FAMILY SERVICE CENTRES 20. Assoc. Prof. Kalyani K Mehta asked the Minister for Community Development, Youth and Sports (a) what is the breakdown on the total number of clients counselled for problem gambling by the Family Service Centres by age group, gender, marital status and income over the past 2 years as well as the success rate; and (b) whether foreign workers are eligible for counselling if they have gambling problems.”
“Mr Speaker, Sir, I beg to move, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$2,661,700", "$132,000", "$3,600", "$2,724,400", "$1,301,500" and "$64,500" in the second column and substituting for them the figures "$3,913,600", "$177,000", "$4,700", "$3,547,700", "$1,282,400" and "$74,400" respectively. Sir, for FY2007, I propose a revised provision for Class I expenditure of $4,095,300, which is $1,298,000 higher than budgeted, and for Class II expenditure of $3,547,700, or $823,300 higher than budgeted, due mainly to the salary increments, salary adjustments and higher bonuses for the Privy Purse and staff. For Class III expenditure, I propose a revised provision of $1,282,400 or $19,100 lower than budgeted, and for Class IV expenditure, of $74,400 which is $9,900 higher than budgeted, to better reflect the expenditure related to the expenses and services of the Household. It is therefore necessary to vary the provisions in the Schedule to the Civil List and Pension Act (Chapter 44) as indicated in the Motion before the House. Sir, I beg to move. Question put, and agreed to. Resolved, That this Parliament, pursuant to section 7 of the Civil List and Pension Act (Chapter 44), resolves that the Schedule to that Act be varied by deleting the figures "$2,661,700", "$132,000", "$3,600", "$2,724,400", "$1,301,500" and "$64,500" in the second column and substituting for them the figures "$3,913,600", "$177,000", "$4,700", "$3,547,700", "$1,282,400" and "$74,400" respectively. ADJOURNMENT Resolved, "That Parliament do now adjourn to a date to be fixed." - [Mr Mah Bow Tan]. Adjourned accordingly at Twelve Minutes past Five o'clock pm to a date to be fixed.”
“In addition to these 14 Acts, clause 6 of the Bill will amend the Interpretation Act such that the authority to provide for fees and charges in subsidiary legislation will also be able to impose and prescribe the interest, charges and penalties for late payment of the fees and charges. This will apply to all current and future cases where fees and charges are provided for and collected. Retrospective provisions The collection of late payment charges and interest had been the right thing to do; hence, the Bill provides for the validation of all past collections of late payment charges and interest that fall under the 14 Acts. Sir, I beg to move. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mrs Lim Hwee Hua]. Bill considered in Committee. [Mr Speaker in the Chair]”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Statutes (Miscellaneous Amendments) Bill 2008 seeks to expressly empower the collection of late payment charges and interest for the late payment of regulated fees, charges and taxes payable under several different legislation. These amendments will regularise the collection of charges and interest. Let me first explain the background and rationale for these amendments. Rationale As a matter of policy, the Government imposes late payment charges and interest for all late payments of fees, charges and taxes. The reason is two-fold. First, late payments of fees, charges and taxes result in additional costs to Government. Besides the opportunity cost of money due to late collections, the Government also incurs administrative costs in chasing arrears. These additional costs should rightly be borne by the late payers, rather than by the public through general taxation. Second, without late payment charges and interest, there would be no incentive for people to pay their fees, charges and taxes on time. For these reasons, it is common in both the private sector and government administrations in other countries to levy late payment charges and interest. Specific legal provisions in the relevant legislation are required to expressly empower relevant Government agencies to collect late payment charges and interest. For completeness, these amendments will expressly provide for such collections under the 14 Acts listed in clauses 2 to 5, and clauses 7 to 16 of the Bill. Clauses 2 to 5, and clauses 7 to 16 of the Bill will amend the 14 Acts to specifically enable the agencies that are responsible for the fees to collect late payment charges and interest on these fees.”
“For the GST, valuation of non-dutiable goods for GST purposes will take its reference from the last selling price if there is a supply. This is because the GST is a value-added tax levied on both the import and supply stages. So, when there is no supply, the valuation basis is actually the same, and the numbers would be the same. So, the two mechanisms are actually not inconsistent. If I may just summarise, we will continue to review the issues raised by the Member and update the Customs Act as and when business changes so dictate. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mrs Lim Hwee Hua]. Bill considered in Committee. [Mr Speaker in the Chair]”
“However, refunds with no interest will be made for overpayments or erroneous payments made by the public on their own accord. On the Member's comment on section 21, the current regime provides certainty and consistency by generally valuing the good and applying the appropriate duty rate at the time of importation. This is a common practice adopted by most customs administrations. If the trader chooses to bond the good into a licensed warehouse so that the duty is suspended until the point of consumption, then the application of valuation and duty rate will be at the time when the good is actually released. If I may also clarify, calculation of duty does not include domestic charges, such as storage and handling. As for the comments on transfer pricing adjustments, the Member is accurate in his observation. This is a challenge and an issue faced by customs administrations worldwide, and Singapore Customs would like to encourage companies to come forward with such issues so that solutions can be worked out for proper customs declarations to be made. In this matter, we would certainly welcome feedback and suggestions as well. On the import valuation mechanism, due to the different nature of customs or excise duties and GST, there is no intention to align the import valuation mechanisms for dutiable and non-dutiable goods under the two different Acts, the Customs and the GST Acts respectively. If I may just quickly explain. Under the WTO Valuation Agreement, the transaction price, which is normally the cost, insurance and freight value, is used as the basis for valuation for dutiable goods on importation as part of the customs and excise duties regime.”
“Next, on clause 5, on the issuance of Customs Rulings; this issuance is really to facilitate trade so as to provide more certainty and predictability for the trade operators. The service standard for issuance of rulings will be published on the Customs website and the Member's suggestions as well as suggestions from the trading community will be taken into consideration. Having said that, we are conscious that we have to avoid being too rigid in terms of stipulating the service standard for the rulings in the Act as Customs will review and improve the process on a continual basis. On the related point in clause 14, whereby the Director-General will be allowed to modify or withdraw the ruling, this is not intended to restrict the usefulness of the ruling for the business community but rather to cater to situations whereby the ruling has to be modified or withdrawn due to a change in circumstances. Let me illustrate with an example. A change in the duty status of a product, eg, from dutiable to non-dutiable, may render the previous ruling irrelevant or inappropriate and, therefore, it would have to be modified or withdrawn. The Member's points are certainly well taken and Customs will continue to strike a balance. Moving on to his other points about the areas that have not been proposed for amendments, on the issue of refunds, as a matter of principle, the Government pays or will pay interest for refunds to the public due to wrongful deductions. This instruction is captured in the Government Instruction Manuals issued by the MOF and applies to all public agencies. The sole aim is to encourage revenue collections to be more accurate and for refunds to be made on a more prompt basis.”
“Mr Speaker, Sir, first of all, I would like to thank Mr Banerjee for his very well articulated views as well as his support for the Bill. Let me now try to address his points in turn. Firstly, I would like to say that we completely agree with him that we should continually review and tweak the laws when necessary so as to remain competitive. I would like to assure him that the amendments would continue to ensure that the Customs rules would remain business-friendly and competitive while at the same time achieving the social and revenue objectives of the Customs Act and our own customs administration. Mr Banerjee referred to section 13 which is covered by clause 3. The Member's reservations are well put. Let me assure him that this amendment is really to provide for the flexibility to grant exemptions from the licensing requirements should the need arise, and I would like to describe further how the Minister would proceed with this exercise. The exemption will be applied judiciously when it is clear that there is no or minimal social or revenue risk and where it does not detract from market competition. Let me illustrate with a simple example as to why we have moved this amendment. For example, there is the home brewing scheme. With this change, we will now exempt individuals who home-brew small quantities of beer and stout for personal use from the licensing requirement. After having implemented the scheme for four years, we note that hobbyists behave responsibly and thus there is no need to subject them to licensing. In addition, we would also seek to exempt by category or activity so as to avoid uneven treatment within a particular category or activity.”
“Clause 16 of the Bill makes an amendment to the GST Act to take account of the abolished licensed factory warehouse scheme in the Bill. Conclusion To conclude, Sir, the Customs Act will be updated to be more business-friendly, to streamline the enforcement regime, and to better facilitate trade. Sir, I beg to move. Question proposed. 3.05 pm”
“The proposed amendment allows analyst certificates from other laboratories specified by the Director-General of Customs to be tendered as evidence in court. This change is covered by clause 11 of the Bill. Re-classifying customs offences The next change relates to the re-classification of customs offences by mode of commission of the offences. This serves to streamline the various offences for better comprehension. There are no changes to the penalties levied on the offences. There are also no substantive changes in the scope of customs offences other than the consequential change to cater for the introduction of the composite licence. Clauses 12 and 13 of the Bill provide for this change. Facilitation of trade Sir, the last category of change seeks to improve the existing Customs process to facilitate trade. The proposed amendments will enable the issuance of Customs Rulings, which are determinations on tariff classification, country of origin and duty treatment. This will give traders greater certainty on the customs rules and duties applicable to the goods. Clauses 5 and 14 of the Bill provide for this change. Miscellaneous amendment on special diesel tax Finally, Sir, in addition, there is one miscellaneous amendment. The amendment relates to the increase in special diesel tax on taxis from $4,700 to $5,100 that had been collected since July 2004, and the special diesel tax collected from one private hire car since October 2002. The tax increase had been announced and implemented, and the proposed amendment will regularise the tax collection. This is covered by clause 4 of the Bill. Consequential changes to the Goods and Services Tax (GST) Act The Bill will also cover one consequential amendment to the GST Act.”
“Empowering the Director-General of Customs to grant a licence for the manufacture of dutiable goods The next change likewise relates to the authority to grant a manufacturing licence to manufacture dutiable goods. Providing Director-General instead of the Minister the power to directly approve such licences simplifies the administration of licence application and is consistent with the issuance of other Customs licences. Clause 8 of the Bill provides for this change. Issuing a composite licence A major change relates to the streamlining of the number of licences for eligible companies. Currently, a company applies for a separate licence for each physical premise to carry out a specified activity, such as manufacturing, warehousing or sale of dutiable goods. For example, a company which carries out two activities at two premises may need to apply for four licences. The proposed amendment allows Singapore Customs the flexibility to grant companies with good risk management control a composite licence for its various activities at the different premises. This reduces the regulatory compliance costs for companies. Clauses 10 and 15 of the Bill provide for the introduction of composite licence. Simplification of penalty provisions and streamlining the enforcement regime Sir, I shall now move on to the second category of amendments that simplify and streamline the current penalty provisions and the enforcement regime under the Customs Act. Allowing analyst certificates from other laboratories to be tendered as prima facie evidence The first change relates to the evidence presented in court. Currently, only an analyst certificate from Health Sciences Authority may be used as prima facie evidence in court.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time". The Customs (Amendment) Bill comprises three main categories of changes. The first provides for the simplification and updating of various Customs rules and requirements to make them more business- and public-friendly. The second category covers amendments to the Customs Act to simplify penalty provisions and streamline the enforcement regime. The third enables Customs to better facilitate trade. Let me now highlight the key changes. Simplification and updating Customs' rules and requirements Exempting any person or goods from any provision of the Customs Act Currently, the Act already provides the Minister for Finance with the power to grant exemption (by Order) from any customs duties, excise duties, taxes, fees or other charges. However, the Act does not provide for the flexibility to grant exemption from Customs rules and requirements. This amendment will enable the Minister to exempt any person or goods from any provision of the Act. Clause 3 will provide the Minister this flexibility to grant exemptions from certain Customs rules, including licensing requirements, when warranted. Waiving the permit requirement to import dutiable goods The second change relates to the authority to waive the requirement on import permit for dutiable goods into Singapore. The proposed amendment allows the Director-General of Customs the flexibility to waive permit requirement on a case-by-case basis. For example, currently, air travellers require a permit to bring in more than 10 litres of liquor, even if the limit is exceeded just slightly. With this amendment, the Director-General may waive the import permit for a bona fide air traveller. Clause 6 of the Bill provides for this change.”
“This is in recognition of their more pressing need to set up home and start a family. Their priority was further enhanced in August 2007 to ensure that at least 90% of the flat supply for public applicants is allocated to them. First-Timers and applicants buying a new flat to stay near their parents or married children, what we call the Married Child Priority Scheme (MCPS), are also given higher chances in the ballot vis-a-vis other public applicants. In addition, First-Timers who are unsuccessful for four or more times previously will be given additional chances in the ballot for new flats. HDB no longer leases out three-room flats for interim rental since the suspension of the Transitional Rental Housing Scheme (TRHS) in January 2002. With the abolition of the previous queue system and reduction in the waiting time for new flats to about three years, there is no longer a need for HDB to provide interim rental flats to young couples. HDB's subletting rules have also been progressively relaxed to make it easier for those who need interim rental housing, to rent a flat or a room from other HDB lessees. Eligible First-Timers who need housing on a more immediate basis can also buy a resale HDB flat that meets their needs and affordability, with a housing subsidy provided by the Government in the form of a $30,000 or $40,000 CPF Housing Grant. First-Timer households in continuous employment for the last 24 months with an average monthly household income of $4,000 or less, can also apply for the Additional CPF Housing Grant of up to $30,000, when they buy a new or resale HDB flat.”
“Sir, these audits are conducted on a frequent and regular basis, so it is not one distinct exercise. Both the systems as well as the platforms are all reviewed on an on-going basis. The results are actually in a way reflected in the Auditor-General's Report each year as well. FLATS FOR NEWLY MARRIED COUPLES (Waiting time) 6. Mdm Cynthia Phua asked the Minister for National Development (a) how long does it take for newly married couples to get their new flats; (b) what is the waiting time for these newly married couples to apply for flats in the new estates in Punggol and Sengkang; (c) what is the waiting time if they were to apply for a three-room interim rental flat; and (d) what are the other alternatives for these couples. The Minister of State for National Development (Ms Grace Fu Hai Yien) (for the Minister for National Development): Under HDB's current Build-To-Order (BTO) system, new housing projects will proceed for construction once a good majority of the units have been sold. Interested buyers can book a new HDB flat when a project is launched, say, in the new estates in Punggol and Sengkang, and collect the keys when the flats are ready about three years later. This is an improvement over the previous queue-based system (Registration for Flats System) where the length of the queue meant that time between application and collection of keys was as long as 7-8 years at the peak. Alternatively, flat buyers today can also book a new flat under HDB's Balloting Exercises or Combined Balloting and Walk-in Sales Exercises for unsold flats. The exercises offer new flats that are already under construction or ready for immediate occupation. First time flat buyers buying a new HDB flat are given priority under HDB's BTO and Balloting exercises.”
“But as Members have noted, removing the 80:20 income tax exemption rule will help charities optimise investment and their use of funds to support a more sustained charitable programme in the quest to meet the longer-term needs of the community. I would like to assure the House that the removal of the rule is unlikely to lead to poor governance, as there are sufficient measures in place taken by the Commissioner of Charities to ensure that the charities and institutions of a public character (IPCs) manage their resources responsibly. For example, the Commissioner of Charities can suspend or shorten the period of IPCs if there are governance lapses. For non-IPC charities, they could also be deregistered by the Commissioner of Charities on similar grounds. As Mdm Ho has noted, the soon-to-be-finalised code of governance for charities and IPCs is not mandatory. But because it is meant to promote self-regulation and not draft more regulations, as this could be too onerous, we are encouraging the disclosure of the extent to which the charity is complying with the code of governance. Madam, I believe I have addressed all the issues. Once again, let me thank Members for their support of the Bill. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mrs Lim Hwee Hua]. Bill considered in Committee; reported without amendment; read a Third time and passed. CENTRAL PROVIDENT FUND (AMENDMENT NO. 2) BILL Order for Second Reading read. 5.58 pm”
“Moving now to REITs, again, I would like to thank the Member for his comments on the drafting quality. His comments are well taken. As I have said, we are always seeking to improve the drafting of legislative changes. In fact, that is why the Income Tax Bill was published for public consultation in June and July to get suggestions on improvements to drafting. For this particular topic, we actually received no suggestions. On the discretion granted to the Comptroller, it is really to enable the Comptroller to respond and to proceed flexibly with regard to the treatment of new business models, as REIT models continue to evolve or change. So this is really more to the contrary, that of providing flexibility. In any case, the Ministry will work with IRAS to make known the details under which the tax transparency treatment will be granted to approve sub-trusts of REITs, to give certainty to the REIT. So there will be a list and there will be the discretion to provide for flexibility to treat and respond to new models. I would wish to make a clarification here, Madam. There are currently separate pieces of legislation addressing the regulation and governance of limited liability partnerships and business trusts. However, all the income tax matters related to these different business forms are incorporated in the various parts of the Income Tax Act based on whether the positions relate to taxability, tax exemp- tions and so on. But I take the Member's point about drafting for clarity. Finally, Madam, on charities. The 80:20 rule, if I may recapitulate, was previously in place to prevent the hoarding of funds and to ensure that spending takes place in Singapore.”
“Foreign investors are attracted to Singapore not solely for tax reasons but because Singapore is a reputable and credible financial hub, and we expect the foreign investors who participate in such schemes to be compliant with the tax laws in their respective home jurisdictions, as it is their responsibility to do so. As it is with any tax incentive scheme, there will be tracking of businesses to ensure that there is no abuse and that there is real substance of economic activity that is carried out in Singapore. With regard to the fund management scheme, Mr Banerjee made a comment about the drafting quality. Madam, there is a need to be legally accurate in our legislation which can sometimes result in lengthy but very specific descriptions. The Ministry is mindful of this and will continue to strike a balance between the need for simplicity and accuracy in our legislative changes. Mr Banerjee has also given some comments on aircraft leasing. The scheme which was enhanced in this year's Budget really serves to position ourselves better as an aviation hub, as we have both the aviation expertise as well as a well-developed financial services sector. There are increasingly many different complex models with which an aircraft lessor may conduct its activities. For certainty of tax treatment, lessors can always seek an advanced ruling from the IRAS, just to be sure. As regards tax treaties, I would like to assure Members that we are constantly reviewing our existing treaties as well as exploring new treaties, but this will remain a challenge. Having said that, for this, we aim to attract lessors who are looking to leverage off Singapore's geographical location and advantage in Asia and our competitive cost of operations as well.”
“The income would be earned in Singapore, as the hearing must be done in Singapore, even if the subject of the dispute does not involve or happen in Singapore or the parties involved do not locate their businesses here. Law firms that are qualified for the tax concession in international arbitration do not compete with companies in other sectors doing businesses overseas. So there is no conflict of interest or competition for incentives. In fact, building Singapore into an international arbitration centre would help Singapore companies which are doing businesses overseas as well, as they can in turn have their arbitration done in Singapore. Mr Inderjit Singh also raised a topic that is frequently discussed, ie, rising business costs. The Minister for Trade and Industry had extensively addressed the issue of rising business costs in this House in August, so I would not repeat his statements. But, nonetheless, I will note Mr Singh's concerns. I would also like to assure Members of the House that the Government is constantly preoccupied with ensuring that we remain competitive on all fronts, and we are therefore open to receiving suggestions from both the GPC as well as from the industry. Moving on now to the fund management incentive which both Mr Inderjit Singh and Mr Gautam Banerjee have raised. The new tax exemption scheme for funds under management will be helpful to the Singapore-based fund managers to the extent that it will give certainty that the fund will not incur tax liability in Singapore simply by virtue of the fact that the fund manager is based in Singapore, or when the resident investor's holdings exceed 20%. So it serves to remove that uncertainty.”
“Allowing pre-commencement expenses will essentially touch on the fundamental issue that only expenses incurred in the production of income are allowable for tax purposes. Such expenses are incurred to put the business in a position to start functioning and are not incurred in the production of income. Therefore, that divide would remain. There is currently already a concession to allow tax deduction for certain revenue expenses, including interest expenses, prior to the commencement of business. Under this concession, a business, other than a section 10(e) company, will be treated as having commenced operations on the first day of the accounting year in which it earns the first dollar of its business receipts. Again, as with all tax incentives, this is a situation where we will continue to monitor for competitiveness reasons. Next, moving on to Mr Inderjit Singh's point about the international arbitration incentive. Our regime, as I said, serves to promote and enable more economic activities to be carried out in Singapore. In the case of international arbitration, we have to recognise that international arbitration carries high economic value and it is also a very mobile one, much more so than for the other professional services. Arbitrations can be held anywhere, and there is stiff international competition. So we have to be proactive with regard to creating incentives. The incentives for the sector will be consistent with the location of more ancillary support services here in Singapore to serve the regional market as well as the global market. A very good example would be the maritime services sector.”
“If we are not attractive as an investment location, then our people will suffer. So corporate tax cuts, as I have said earlier, are a reality. They are not conceived at the expense of Singapore residents. It is difficult to have statistics showing the direct correlation between tax rates and the investment or job creation. Nonetheless, if we were to track the investment commitments made over the last few years, they have remained healthy at over $8 billion for each of the last three years. I would agree with Mdm Ho that we should continue to share information on the increased economic activity level as a result of the tax incentives and the benefit, in terms of job creation that this has brought to Singaporeans. Mdm Ho also made suggestions about helping new companies. Madam, I would like to clarify that currently, we already grant a full tax exemption for the first $100,000 of normal chargeable income for new companies that meet the qualifying conditions during the first three years of assessment of their establishment. So this is specifically targeted to help start-up companies. This concession, which was due to expire in Year of Assessment 2009, was extended indefinitely during this year's Budget. Also, in the same Budget Statement, the partial tax exemption, as Members have heard, of all companies, not just new start-ups, was raised from $100,000 to $300,000. We will continue to monitor these limits for effectiveness and will make the necessary changes where it is deemed to be helpful. Madam, let me now go to the specific points raised by the different Members. Mr Gautam Banerjee asked if we could allow the deduction of pre-commencement interest expenses.”
“In other words, we have lower and more progressive personal income tax rates for the lower and middle income taxpayers. On corporate taxes, I would agree with Mr Inderjit Singh that the headline tax rate cannot be viewed in isolation and it is always the overall tax package that matters. Even though our headline corporate tax rate of 18% is higher than that of competitors like Ireland and Hong Kong, our tax regime is still competitive. Let me elaborate. For example, with the partial tax exemption granted on the first $300,000 of income as approved in this year's Budget, about 93% of the tax-paying companies will pay tax at effective rates of below 16.5%, which is Hong Kong's tax rate. And about 82% of the companies will pay an effective tax rate of below 12.5%, which is Ireland's corporate tax rate. So there are many more companies here that are actually paying below the respective tax rates. Singapore's competitiveness is not just about low tax rates. Indeed, the World Economic Forum ranked Singapore as the most competitive economy in Asia and the seventh most competitive economy overall in its 2007/2008 Global Competitiveness Report. Nonetheless, we will not be complacent and we will continue to monitor the global environment to ensure that our tax regime remains competitive. Madam, Mdm Ho asked if there was a correlation between the corporate tax cuts and investments. We recognise and we have to accept that we live in a competitive world and that companies will locate where it makes the most economic sense for them to do so. Many factors come into play, in terms of determining their investment decisions, but a favourable tax regime is a key factor in helping Singapore attract investments and creating good jobs as a consequence.”
“Mdm Deputy Speaker, first of all, let me thank all three Members for their support of the Bill. I will try and respond to as many points and suggestions as possible. Madam, the topic of tax competitiveness has been extensively debated in this House, especially during the past Budget, so I will be specific with regard to the comments. Nonetheless, I would like to reiterate the overall approach which is that the taxation framework would serve as an enabler of economic activity and it would always be changed, designed or refined so as to respond to changing business conditions, to be conducive to the pursuit of new opportunities and, ultimately, to ensure that Singapore's competitiveness will remain. Firstly, on Mr Inderjit Singh's comments on the Hong Kong's tax system. I will not speculate on how Hong Kong determines its personal and corporate income tax rates as this is a matter for their policy-makers, except to say that in Singapore, we set our personal income tax and corporate tax rates in a way where we can ensure that it is competitive and encourages work, savings and enterprise. There is no pre-conceived intent to make personal income taxes higher than corporate income taxes or vice versa. So, ultimately, it is really competitiveness that is the key consideration. And as we all know, there is a global trend towards cutting corporate tax rates, so we expect to face continued pressure to lower our corporate tax rates. As regards personal income taxes, there is also the issue of ensuring progressivity within our system. Although Hong Kong has a lower headline personal income tax rate, the vast majority of taxpayers enjoy a lower effective tax burden in Singapore than Hong Kong, because Singapore's tax system is more progressive.”
“Mdm Deputy Speaker, I beg to move. Question proposed. 5.16 pm”
“(d) Amendment to eligibility criteria for Parenthood Tax Rebate and Working Mother's Child Relief The Parenthood Tax Rebate is currently given for a qualifying child who at the time of birth has siblings in the same household. For reconstituted households after a divorce, both divorcees may want to claim the same child or children from their previous marriage as a member of their separate households, so that any subsequent births in their new families can qualify for the rebate. This change will specify the manner of determining the household membership of children born before the divorce of the parents, so as to avoid the situation of the same child being double counted in separate households for Parenthood Tax Rebate claims. Currently, when there is a divorce, both the biological and stepmothers could potentially claim Working Mother's Child Relief for a qualifying child. The change is to allow Working Mother's Child Relief for only one claimant in respect of the child. The deduction shall only be made to a married woman, divorcee or widow who has maintained the child, and shall be limited to only one claimant. Where there are competing claims, the Comptroller shall determine, having regard to the circumstances of the case, to whom the deduction shall be allowed. Both changes will take effect from Year of Assessment 2008. These changes are covered by clauses 24 and 41 of the Bill. Finally, Madam, 13 other changes have been incorporated in this Bill. As they are either technical in nature or relate to improvements in tax administration, I will not put members through the details of these remaining changes. Conclusion With the above changes, the Income Tax Act will be enhanced and updated to better achieve our economic and social objectives.”
“(b) Enhancement and refinement of tax transparency treatment for Real Estate Investment Trusts (REITs) The scope of the tax transparency treatment currently granted for REITs is further enhanced to encourage the listing of REITs in Singapore. Tax transparency treatment means that the REIT will not be subject to income tax on its qualifying income at the trust level. Instead, the distribution out of such income will be assessable in the hands of REIT unit holders, unless otherwise exempted. With the enhancements, the Comptroller of Income Tax will be able to extend tax transparency treatment to a wider range of income streams derived by REITs from the activities they engage in. This will help to improve the tax competitiveness of our REITs regime. These changes take effect from Year of Assessment 2008. Clauses 6(e), 20(f), 25(b), 25(c), 25(d) and 25(j) of the Bill provide for these changes. (c) Amendment to facilitate income tax data sharing To facilitate the application by individuals for Government schemes such as social assistance, this amendment provides explicitly that the Comptroller of Income Tax may share taxpayer information with relevant Government agencies, subject to the express consent by taxpayers to release the information. This amendment to facilitate income tax sharing will also allow the Comptroller to share non-identifiable taxpayer information with relevant Government agencies to improve research and the quality of statistics for policy formulation and evaluation. Agencies receiving the information will be subject to rules that ensure that the confidentiality of the information is not compromised. These changes are covered by clause 2 of the Bill.”
“(e) Promoting fund management in Singapore As part of Singapore's continuing efforts to promote the fund management industry, the "80:20" rule under our tax exemption incentive scheme for non-resident funds will be removed. Details of the revised tax exemption scheme for fund management have been released by the Monetary Authority of Singapore on 31st August this year. The revised scheme gives certainty of tax exemption to foreign investors and allows resident investors to also invest in managed funds, subject to specified investment limits. The changes will help to boost the fund management industry and provide fund managers based in Singapore with greater flexibility in sourcing for mandates. These changes are covered by clauses 7, 10 and 42(o). Other tax policy changes Sir, I shall now deal with other tax policy changes which require amendments to the Income Tax Act. Our existing tax policies and incentive schemes are reviewed regularly to ensure they remain relevant. Let me highlight four major changes to our tax policies and incentives that came about as a result of this review process. (a) Deferral of claim for accelerated capital allowance Currently, accelerated capital allowances are granted over three years in respect of capital expenditure incurred on plant and machinery used for the purposes of trade, business or profession. Once the claim is made, the law requires that the accelerated capital allowances be made over three years on a consecutive basis. This requirement is now lifted. This change will give taxpayers flexibility to defer the claim for accelerated capital allowances. This change takes effect from Year of Assessment 2009. Clause 16(a) of the Bill provides for this change.”
“(c) Lifting the sunset clause for the Income Tax Exemption Scheme for newly incorporated companies Currently, newly incorporated companies may qualify for full tax exemption on the first $100,000 of chargeable income for each of the first three Years of Assessment falling between Year of Assessment 2005 and Year of Assessment 2009. As part of Government's continuing efforts to encourage entrepreneurship, the Year of Assessment 2009 expiry date will be removed. Clause 25(h) of the Bill provides for this change. (d) Promoting Singapore as a philanthropy hub Several changes to the taxation and regulatory framework for charity were announced in Budget 2007. They formed part of our efforts to promote charitable giving and develop Singapore as an attractive international hub for philanthropic and not-for-profit organisations. One major change is the removal of the "80:20" spending rule for income tax exemption for charities. With effect from Year of Assessment 2008, we will remove the requirement for charities to spend at least 80% of their annual receipts on charitable objects in Singapore within two years in order to enjoy income tax exemption. All registered and exempt charities will enjoy automatic tax exemption. This will enable charities to optimise their investments and use of funds over time to sustain their charitable programmes in Singapore as well as overseas. These changes are covered by clauses 6(g) and 8 of the Bill. A new tax incentive scheme has also been introduced to give income tax exemption to approved not-for-profit organisations that can either bring economic value to Singapore with linkages to key industry clusters or contribute to developing Singapore as a philanthropy hub. Clause 11 of the Bill provides for this tax exemption.”
“Mr Speaker, Sir, I beg to move, "That the Bill now be read a Second time". The Income Tax (Amendment No. 2) Bill 2007 comprises two categories of changes. The first provides for the income tax changes announced in this year's Budget Statement in February 2007. The second category covers other amendments to the Income Tax Act arising from regular reviews to improve our income tax system. [Mdm Deputy Speaker (Ms Indranee Rajah) in the Chair] 5.07 pm The Income Tax (Amendment No. 2) Bill was released for public consultation from June to July this year. The draft Bill has been revised to incorporate suggestions from businesses and members of the public. Tax policy changes announced in 2007 Budget Statement Let me first highlight the key policy changes that were announced in the 2007 Budget Statement. (a) Reducing corporate tax rate With effect from Year of Assessment 2008, the corporate income tax rate will be reduced from 20% to 18%. This change, together with other related changes, is reflected in the Bill under clauses 18, 20(b), 25(a), 25(e), 25(i), 29, 30, 31(a), 31(b), 31(c), 33 and 35(b). (b) Increasing partial tax exemption threshold for companies The chargeable income of companies that qualifies for partial income tax exemption will be increased from the current $100,000 to $300,000 with effect from Year of Assessment 2008. With the change, 75% of the first $10,000 of chargeable income and 50% of the next $290,000 of chargeable income will be exempt from income tax. Clauses 25(f) and 25(g) of the Bill provide for this change.”
“Mr Speaker, Sir, the recent fare increase relates to fare stages. Because the senior citizen fares are pegged to the lowest fare band of the adult trunk fares, therefore, when that goes up, the senior citizen fares would also go up by the same amount. There is no deliberate attempt by the public transport operators to increase fares specifically for the senior citizens. As I have implied in my earlier reply, not all senior citizens are needy. But for those who are in need of help, there would be targeted help by way of ComCare as well as the Public Transport Fund. Er Lee Bee Wah: In view of the increasing number of senior citizens who will have to come out and work, as we want them to work longer, can the Ministry look into the formula that MOS has just explained, ie, the formula of how the fares for senior citizens are arrived at? Mrs Lim Hwee Hua: Mr Speaker, it is not quite clear to me what the Member is suggesting. Is she suggesting that senior citizen fares be looked at as a category on its own? But she would also notice that by her projected increase in numbers, it would mean that the more concessions that are granted to this increasing group, the more the other full fare paying commuters would have to bear. CPF REFORMS AND OTHER MEASURES FOR A SECURE RETIREMENT Order read for resumption of debate on Question [17th September 2007], "That the CPF Reforms and Other Measures for a Secure Retirement be considered by Parliament.". - [Leader of the House]. Question again proposed. 1.42 pm”
“Mr Speaker, Sir, I am not able to predict how much increased travel there will be by senior citizens. But certainly with more of them continuing to work, there is a possibility that that will increase. But, ultimately, the same case can be made for students and for others who are currently enjoying concessionary fares as well. As to what this means in terms of cross-subsidy, it is not possible for me to isolate the impact. But, at the end of the day, the public transport operators have to be commercially viable. And the more concessions that they hand out by way of extending hours or by way of extending the group that will receive the concessions, the more the other full fare paying commuters would have to cross subsidise. That, ultimately, would be the question in terms of affordability of the overall public transport system that everyone has to consider.”
“Sir, currently, concessionary travel for senior citizens is granted by the public transport operators. The operators have been extending the concession hours for senior citizens over the years. For example, in 2005, the concession period was extended such that senior citizens could enjoy concession fares an hour earlier on weekdays, starting from 9.00 am instead of 10.00 am. Full day concessions currently apply for weekends and public holidays. The cost of such concessions is borne by the operators and ultimately cross-subsidised by other full-fare paying adults. Hence, the operators have to take this into consideration when extending concessions. Nonetheless, my Ministry will continue to monitor this issue and work with the public transport operators to review the concession hours. Whatever the concessionary hours, some senior citizens would need more targeted help. Under our 'Many Helping Hands' approach, needy senior citizens can get help from the ComCare Fund and other community assistance schemes. The Government will also commit $10 million to a Public Transport Fund in October 2007 to be given out over three years to provide additional help to lower-income households. Er Lee Bee Wah (Ang Mo Kio): I would like to ask MOS whether she foresees large numbers of senior citizens taking public transport during peak hours. Indeed, if they travel, I think it is because they have to, such as going to work; otherwise, they would like to avoid the peak hours. Question two: can the MOS please elaborate how much will the cross-subsidy be? Is the amount so large that the transport operators cannot afford it? To my understanding, there is a fixed cost, whether the train or the bus carries one passenger or full capacity.”
“Mr Speaker, Sir, the point that the Member has raised is well taken. But that is precisely the reason the LTA is very careful in terms of the roads that it chooses to implement the full-day bus lane scheme. This is not implemented throughout the whole country. So the roads are carefully chosen and these are the roads that cover many bus services, and the idea is to provide an incentive for more people to go onto buses. PUBLIC TRANSPORT CONCESSION PASS FOR SENIOR CITIZENS (Review) 2. Er Lee Bee Wah asked the Minister for Transport whether his Ministry will consider reviewing the use of the public transport concession pass for senior citizens to make it valid for a full day on weekdays.”
“Sir, the overall philosophy of giving buses priority is one of recognising that buses are the most efficient movers in terms of the masses of people that they are able to convey. Within Singapore where there is a limitation to the amount of road space that we can increase, public transportation and therefore buses would remain one of the priorities. In deciding to accord full-day bus lanes, the Ministry has carefully chosen roads and stretches which have maximum benefit in terms of the number of services that they would cover. As to whether we should consider the loading of buses, that is one possibility. Ultimately, the aim is actually to incentivise more people to go onto buses by assuring them of a quick travel time through the provision of this full-day bus lane scheme. In terms of the obstruction to buses, whether it is a question of zig-zag lines, ultimately it is a question of enforcement and that would continue to be used rather than to find an alternative way of indicating what would constitute an offence. As to whether there should be regulations that will limit buses from using other than bus lanes, the idea is not to provide inflexibility. As I have said, it is buses that we will want to have smooth travel on the roads than other vehicles. Mr Speaker: Mr Lim, last question. Be brief, please.”
“Mr Speaker, Sir, the opening of Phase One of the KPE from the ECP at Fort Road to the PIE from 26th October 2007 will bring relief to traffic flows on the road network in its vicinity and will mainly benefit motorists from Kallang, Geylang and the surrounding neighbourhoods. Motorists using the PIE and CTE to access the city presently will have an alternative route, while those from further north are expected to continue using the CTE. The KPE is therefore expected to relieve the pressure on the CTE only when the entire KPE is opened by late 2008. My Ministry recently announced the extension of the ERP coverage on the CTE and other expressways as traffic conditions on these roads have deteriorated below the speeds for optimal flow. We cannot afford to wait until the KPE is completed in late 2008 before addressing traffic congestion on these roads. However, after the KPE is opened, we will review and adjust the ERP rates of the roads in its vicinity accordingly, based on the prevailing traffic conditions on these roads then. DEATHS DUE TO STRENUOUS EXERCISES AND LONG DISTANCE RUNS 13. Dr Lily Neo asked the Minister for Community Development, Youth and Sports (a) in the past two years, what is the number of incidences of seemingly well individuals whose deaths are due to strenuous exercises; and (b) whether the Minister has information on the causes of death for these cases. 14. Mr Chiam See Tong asked the Minister for Community Development, Youth and Sports what measures will be taken by his Ministry to improve the safety culture in long distance runs requiring mass participation.”
“For example, it has been forging collaborations with the Family Service Centres and voluntary welfare organisations to provide counselling services to Muslim couples with marital difficulties. To date, 14 partner agencies have come on board and, as at December 2006, 58% or about 1,880 cases have been referred to the partner agencies. The Syariah Court has also taken steps to build up a pool of ad hoc mediators who will complement the full- time mediators in the Syariah Court. Currently, there are four ad hoc mediators, and this arrangement gives the Court the flexibility to tap on its ad hoc mediators pool when case loads are high.”
“Sir, currently, EMAS displays information to guide motorists so that they can decide what route they should take in terms of the travel time or in terms of specific incidents, and certainly there is room for improvement of information displayed in the various places. So that would continue to be the guide towards improving traffic flow. The use of the ERP charging system has been instrumental in guiding behaviour, in terms of making decisions on whether to, first of all, even drive or use public transport and, secondly, which roads to use. By and large, the decision to charge specific stretches is guided by the speeds along those stretches as opposed to what would constitute a reasonable charge for someone going from point A to point B. Hence, the decision to charge certain stretches of the CTE would really revolve around whether the speeds along those stretches are acceptable, and not whether by imposing or reducing that charge, the overall cost has gone up or down. SYARIAH COURT (Provision of counselling and mediation services to divorcing couples) 2. Mdm Halimah Yacob asked the Minister for Community Development, Youth and Sports in view of the 80% increase in Muslim divorce cases in 2006 compared to a decade ago, whether the Syariah Court has enough resources to cope and to provide counselling and mediation services to divorcing couples. The Minister for the Environment and Water Resources and Minister-in-charge of Muslim Affairs (Assoc. Prof. Dr Yaacob Ibrahim) (for the Minister for Community Development, Youth and Sports): Mr Speaker, Sir, the Syariah Court has been able to cope with the increase in divorce cases among Muslim couples by tapping on counselling expertise outside the Court.”
“It is not appropriate to enlarge the ASC's ambit at this juncture to include statutory boards or other entities not specifically mentioned in clause 3. The Council, as it is, with 16 members, including the Chairman, is already quite big, and enlarging its ambit would require the inclusion of even more members. It will also cause the Council to lose its focus and, worse still, slow down the accounting setting process. Nonetheless, the Government will review this arrangement two years down the road to see whether there are benefits to widening the ASC's mandate to include statutory boards and other entities as well as whether the ASC should be composed differently. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mrs Lim Hwee Hua]. Bill considered in Committee; reported without amendment; read a Third time and passed.”
“Firstly, if I may reiterate, clause 11(2) has very specifically stated that the Accountant-General will take reference from or have regard for the accounting standards that are established by the ASC. So, as a default, that will be the starting point. The IFRS will be the starting point. In other words, there will be no cherry picking. They begin with that set of accounting standards. I also wish to inform the Member that the Accountant-General will be assisted and advised by a committee with independent members, with representatives from the Auditor-General's Office, the statutory boards, the academic community and the public accounting firms. So there is a broad representation of membership. This is actually in substance not very different from what the UK is practising where the Treasury prepares the standards and submits it to the Advisory Committee for consultation. The third point is that there are areas, as I have mentioned in my Second Reading speech, where the SFRS does not provide sufficient guidance for statutory boards, for example, how the assets of PPPs should be accounted for, and that is why there should be this special purview accorded to the Accountant-General. Sir, if I may just summarise, in reference to the other comments that Mr Banerjee has also made. Ultimately, our goal is to enhance accountability, therefore, adopting standards that are appropriate to our circumstances, in a sustainable manner, is most crucial. The Government will continue to emphasise substance over form. We would have to choose the form that is appropriate to us, but the substance remains the same as that being practised in most of the other jurisdictions. Currently, we are also very much guided by the type of resources that we have for the ASC to carry out its mission.”
“Mr Speaker, Sir, first, I would like to thank Mr Gautam Banerjee for his support of the Bill and for his very well-argued comments. Let me now respond specifically to his suggestions relating to the setting of accounting standards for the statutory boards. The Member has actually asked that departures from IFRS be clearly explained and submitted to the Public Accounts Committee of Parliament. This may not actually be appropriate as the Public Accounts Committee of Parliament is non-executive in nature and it does not actually have executive powers vested in it. Currently, the Public Accounts Committee has its remit revolving around the observations that are contained in the Auditor-General's Report. But having said that, it does not stop the Public Accounts Committee from raising any issues or questions that they may have regarding accounting standards if it wants to or when it needs to. It is free to do so, to seek clarification on how an accounting standard is applied or why there is a deviation from international accounting standards. And for that matter, it does not stop any Member of Parliament in this House to raise any questions that he or she may have pertaining to not just accounting standards but also on any matter of statutory boards because that represents the greatest extent of the kind of check and balance that we have for the statutory boards. On his suggestion and reservation about whether the ASC should be responsible for the issuance of accounting standards for all entities, including the statutory boards, let me just provide the following points by way of providing assurance regarding the need to benchmark against international standards as well as the due process.”
“Let me assure the House that this will not lead to a "cherry-picking" of accounting standards for statutory boards. Clause 11(2) of the Bill provides that the Accountant-General, in establishing the accounting standards, shall first take reference from the standards and interpretations issued by the ASC. The Accountant-General would modify or introduce new standards or guidelines only in areas where the SFRS is lacking or where the SFRS is providing insufficient guidance to statutory boards. An example of an area currently not clearly addressed by the SFRS, which might necessitate the intervention of the Accountant-General, is how assets of Public-Private Partnerships (PPP) should be accounted for in the books of public sector agencies. Conclusion Sir, the creation of the ASC is a positive step towards ensuring that local accounting standards are of a consistent high quality. More importantly, the ASC will draw up standards that are customised to the circumstances of non-corporate entities, which would help them to provide a clearer link between their objectives, activities and results to their stakeholders. Sir, I beg to move. Question proposed. 4.09 pm”
“Under the ASC, the accounting standards for charities would continue to take reference from the SFRS and would be supplemented with specific requirements to meet the special accounting needs of charities. As the ASC would need some time to formulate the accounting standards for charities, the Ministry of Community Development, Youth and Sports would, in the meantime, conduct a holistic review of the Charities Act. Hence, the necessary consequential amendments to the Charities Act to make it mandatory for all charities to comply with the charities' accounting standards would be moved in Parliament at a later date. Accounting standards for statutory boards Sir, let me move on to the accounting standards for statutory boards. Clause 11 of the Bill empowers the Accountant-General (AG) to establish accounting standards for statutory boards. This is, in effect, a formalisation of the current arrangement whereby MOF, through the Accountant-General's Department, would issue finance circulars to prescribe the accounting standards to be complied with by statutory boards. While statutory boards may share certain characteristics of corporations, there is a fundamental difference, which is that statutory boards do not have public shareholders and are directly accountable to Parliament. Hence, standards that are formulated based on the profit motive, which is of paramount concern to shareholders and creditors or donors, may not always be appropriate for statutory boards. Instead, the accounting standards for statutory boards would be driven by the three objectives of enhancing statutory boards' accountability to Parliament, strengthening transparency, and ensuring a better and more efficient stewardship of public assets.”
“The monitoring and enforcement of compliance with accounting standards will remain the prerogative of the respective regulators, namely, ACRA for companies, Commissioner of Charities for charities, Registrar of Co-operatives for co-operatives and Registrar of Societies for societies. Accounting standards for charities Currently, a charitable organisation may be set up as a company, a society or a trust, before registering with the Commissioner of Charities as a charity. While charities incorporated as companies are required by the Companies Act to comply with the SFRS, there is no such requirement for charities that are registered as societies or trusts. This inconsistent treatment creates an uneven situation where certain charities are subject to a more stringent disclosure regime owing to the legal vehicle they have adopted. This also makes it difficult to compare the financial health of, say, two charities which may be pursuing the same charitable objects, but are set up using different legal vehicles. To address this, the consequential amendments to the Companies Act and the Societies Act provide that once the accounting standards for charities have been formulated and promulgated, they will take precedence over accounting standards for companies and for societies. This means that in future, a charity, regardless of the legal vehicle it uses, will have to comply exclusively with the accounting standards for charities. This is in line with the policy objective of having accounting standards that are more appropriate and relevant to the purpose the entity is set up to pursue. This practice of having a separate set of accounting standards for charities is consistent with the practice in the UK.”
“The ASC would ensure that the accounting standards set are relevant to the entities they are applicable to, are readily understandable by both the preparers and users of financial information and can facilitate comparability. In addition, to ensure that stakeholders are fully aware of the accounting standards issued, the ASC is required, under clause 10 of the Bill, to publish a notice of the making of that accounting standard. It will also have to make available copies of it, and with all prior amendments, for inspection by members of the public. In formulating the accounting standards for non-corporate sector entities, the ASC will consider the suitability of the proposed accounting standard to the entities concerned and will, if necessary, apply different accounting requirements to different types of entities. The ASC is empowered to propose suitable modifications to existing SFRS to make them more appropriate and relevant for these entities, but without compromising the quality of the standards. In areas where there is presently no SFRS, the ASC may consider either issuing its own standards or adopting an alternative set of standards. This framework which consolidates the accounting standards setting authority for both corporate and non-corporate entities under one roof will ensure consistency in standards, facilitate comparison of accounts between different entities, and enhance the credibility and transparency of reporting. The ASC is responsible only for the formulation and promulgation of accounting standards.”
“This is not surprising as their auditors need to audit them against an acceptable accounting standards framework, which, by default, is the SFRS. This is not always satisfactory for these non-corporate entities as they find themselves having to comply with accounting standards that may not be suitable for their purposes since the SFRS were drawn up primarily for companies. Consolidated accounting framework for private and people sector entities Hence, to address this gap, the Accounting Standards Bill provides for the creation of a well-represented council, which would be known as the Accounting Standards Council, or ASC for short. Parts I and II of the Bill establish the ASC and set out its functions, constitution, as well as the procedures for its meetings and proceedings. Clause 3 establishes the functions of the ASC, namely, to prescribe accounting standards for companies and for any other entities like societies, charities and co-operatives. With its functions on corporate governance issues and company accounting standards taken over by the SGX/MAS and the ASC respectively, the CCDG will be dissolved. I would like to, at this moment, thank the Chairman and members of the CCDG for their significant achievements and contributions. Clause 4 of the Bill allows the Minister for Finance to appoint a Chairman and up to 15 members to the ASC. The ASC will comprise senior accounting professionals, regulators, preparers and users of financial information, among other stakeholders. Part III sets out the manner the ASC would go about setting accounting standards. Clause 9 of the Bill provides the objectives behind the accounting standards formulated by the ASC.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill before the House seeks to establish the Accounting Standards Council in place of the Council on Corporate Disclosure and Governance (CCDG) to issue accounting standards applicable to companies, and other incorporated and unincorporated bodies. The Bill will also require certain statutory bodies to prepare their financial statements in accordance with accounting standards established by the Accountant-General. Background In August 2002, the CCDG was set up under the Companies Act as the authority to prescribe accounting standards, namely, the Singapore Financial Reporting Standards (SFRS), for all companies. It also advises the Ministry of Finance on corporate governance issues pertaining to listed companies. The CCDG has served its purpose well. In the area of corporate governance, it has laid down the foundation of a strong and robust corporate governance framework for listed companies. It is now timely for this function to be taken over by MAS and SGX, given the synergies with their role as market regulators of listed companies. This would help to ensure a consistent approach in prescribing mandatory requirements and best practices for listed companies. Similarly, in the area of accounting standards, the CCDG has done much to improve the efficiency and rigour of the accounting standards setting process for companies. The CCDG, however, has no authority to issue accounting standards for non-corporate entities such as societies and co-operatives, as it derives its authority from the Companies Act. These non-corporate entities have often been adopting the SFRS, even though they are not legally required to do so.”