The MOF issues draft Income Tax (Amendment) Bill 2008, Goods and Services Tax (Amendment) Bill 2008 and Stamp Duties (Amendment) Bill 2008 for public feedback

The Ministry of Finance (MOF) has issued its annual invitation to the public to comment on proposed changes to the tax acts. June saw the launch of the public consultation exercise for the draft Income Tax (Amendment) Bill 2008, followed shortly by the draft Goods and Services Tax (Amendment) Bill 2008 and Stamp Duties (Amendment) Bill 2008 in August.

Draft Income Tax (Amendment) Bill 2008

As usual, the proposed changes related mostly to tax changes announced during the 2008 Budget Speech, and feedback sought on these changes related to the clarity of the drafting of the legislation.

In addition, other tax changes and refinements to existing tax policies and administration were proposed, including the legislation of a "No Filing System" for individuals, the double tax deduction scheme for donations made to qualifying grantmakers, the extension of specified tax incentives to partnerships and the "Last-in, First-out" (LIFO) method as an acceptable method to be used in computing the deductible cost of treasury shares.

For these non-Budget changes, MOF sought feedback on the policy aspects of the amendments as well as the clarity of the proposed legislation.

The consultation period ended on 28 July 2008 and the MOF is expected to release a summary of the feedback received by September 2008.

Draft Stamp Duties (Amendment) Bill 2008

One of the proposed amendments to the Stamp Duties Act relates to the extension of stamp duty relief for intra-group transfer of assets to unlimited companies, statutory boards and limited liability partnerships (LLPs) where the partners are companies, registered business trusts, statutory boards and other qualifying LLPs, which was announced during the 2007 Budget Speech.

Non-Budget changes are refinements to the existing tax policies and administration resulting from on-going reviews of the stamp duty system. They relate to the removal of mandatory adjudication for the transfer of shares and property by way of a gift and provisions for the appointment of any public officer as an agent of any taxpayer for the purpose of recovering any tax or penalties.

Draft Goods and Services Tax (Amendment) Bill 2008

The draft Goods and Services Tax (Amendment) Bill 2008 also includes a Goods and Services Tax (GST) change proposed during the 2007 Budget Speech, namely, the extension of zero-rating to the sale, lease and servicing of containers used in the international transport of goods. Non-Budget GST changes include zero-rating treatment for supplies of customised machinery used in the manufacture of goods for export, provisions to grant power to the Comptroller of GST to appoint agents to recover tax arrears from any person who is liable to pay tax or penalties and amendments to the definition of "unit trust" in the GST Act to include business trusts which will provide clarity to financial institutions that the units issued by unit trusts (including units issued by business trusts) are exempt supplies under the GST Act.

Similar to the Income Tax Act, for both the Stamp Duties Act and GST Act, public feedback was sought on the clarity of the drafting of the legislation; for non-Budget changes, comments on the policy aspects were also sought. The consultation period has ended and MOF is expected to release a summary of the feedback received in November 2008.

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