Income Tax (Amendment No. 2) Bill

Bill No. 52/1975

Read the first time on 11th November 1975.

An Act to amend the Income Tax Act (Chapter 14) of the Revised Edition).

Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows: —

Short title

1.—(1) This Act may be cited as the Income Tax (Amendment No. 2) Act, 1975.

(2) Section 3(a) of this Act shall have effect from the 1st day of April 1975.

(3) Sections 4 and 8 of this Act shall have effect for the year of assessment 1976 and subsequent years of assessment.

Amendment of section 2

2. Section 2 of the Income Tax Act (hereinafter in this Act referred to as “the principal Act”) is hereby amended by inserting immediately after the word “by” appearing in the fourth line of the definition of “Comptroller” therein the expression “subsection (5) of section 45 and”.

Amendment of section 13

3. Section 13 of the principal Act is hereby amended —

(a)	by deleting paragraph (a) of subsection (1) thereof; and
(b)	by inserting immediately after the word “tax” appearing in the eighth line of subsection (2) thereof the words “wholly or in part and”.

Amendment of section 14

4. Section 14 of the principal Act is hereby amended —

(a)

by inserting immediately after the expression “section 19” appearing in the proviso to paragraph (c) of subsection (1) thereof the expression “or 18A”; and

(b)

by inserting immediately after subsection (2) thereof the following subsections: —

“(3) Notwithstanding the provisions of subsection (1) of this section where outgoings and expenses falling within that subsection are incurred in respect of a motor car to which this subsection applies the sum to be allowed as a deduction shall be limited to the amount which bears to such outgoings and expenses the same proportions as fifteen thousand dollars bear to the capital expenditure incurred, where such capital expenditure exceeds fifteen thousand dollars:

Provided that any deduction for the cost of renewal of a motor car to which this subsection applies shall not exceed fifteen thousand dollars.

(4) Subsection (3) of this section shall apply to a motor car which is constructed or adapted for the carriage of not more than seven passengers exclusive of the driver and the weight of which unladen does not exceed three tons except —

(a)	a taxi;
(b)	a motor car registered as a private car (school transport); and
(c)	a private hire car which is hired to the same person for not more than six months in any year.”.

Amendment of section 19

5. Section 19 of the principal Act is hereby amended by inserting immediately after subsection (2) thereof the following subsections: —

“(2A) Notwithstanding the provisions of subsection (1) and (2) of this section where a motor car to which this subsection applies is acquired after the 3rd of March, 1975 —

(a)	the initial allowance to be made under subsection (1) of this section shall be calculated on an amount equal to the capital expenditure incurred in respect of that motor car or fifteen thousand dollars whichever is the less;
(b)	the annual allowance to be made under subsection (2) of this section shall be calculated on the basis that the original cost of that motor car is the capital expenditure incurred or fifteen thousand dollars whichever is the less; and
(c)	the aggregate of the initial and annual allowances to be made under this subsection for all relevant years of assessment shall not exceed fifteen thousand dollars.

(2B) Notwithstanding subsection (2) of this section where the amount of the reducing value of a motor car to which this section applies exceeds fifteen thousand dollars at the end of the basis period immediately after the 3rd day of March 1975, the amount in excess of fifteen thousand dollars shall be disregarded and the reducing value of that motor car at the end of the basis period shall be deemed to be fifteen thousand dollars.

(2C) Subsections (2A) and (2B) of this section shall apply to a motor car which is constructed or adapted for the carriage of not more than seven passengers exclusive of the driver and the weight of which unladen does not exceed three tons except —

(a)	a taxi;
(b)	a motor car registered as a private car (school transport); and
(c)	a private hire car which is hired to the same person for not more than six months in any year.”.

Amendment of section 20

6. Section 20 of the principal Act is hereby amended by inserting immediately after subsection (4) thereof the following subsection: —

“(5) Notwithstanding anything in the preceding provisions of this section, where a balancing allowance or charge falls to be made under subsection (1) of this section in respect of —

(a)

a motor car acquired after the 3rd day of March 1975 to which subsection (2A) of section 19 of this Act applies, the sum to be taken in lieu of the open-market price or sale, insurance, salvage or compensation monies for the purpose of calculating such balancing allowance or charge shall be ascertained in accordance with the formula

; and

(b)

a motor car acquired on or before the 3rd day of March 1975 to which subsection (2B) of section 19 of this Act applies, the sum to be taken in lieu of the open-market price or sale, insurance, salvage or compensation monies for the purpose of calculating such balancing allowance or charge shall be ascertained in accordance with the formula

where A

is the open-market price or sale, insurance, salvage or compensation monies in respect of the motor car; and

is the capital expenditure incurred in respect of the motor car; and

is the aggregate of the initial and annual allowances made in respect of the motor car before subsection (2B) of section 19 of this Act has effect in relation to that motor car.

”.

Amendment of section 27

7. Section 27 of the principal Act is hereby amended by inserting immediately after subsection (5) thereof the following subsection: —

“(6) Notwithstanding anything in the preceding provisions of this section, if in computing the profits derived by a resident in Singapore from carrying on the business of a shipowner or charterer, the tax authority of a foreign country determines such profits to be an amount which exceeds five per cent of the full sum receivable on account of the carriage of passengers, mails, livestock and goods shipped in that foreign country, the Minister may if he thinks fit direct that, in computing the profits derived in Singapore by a non-resident shipowner or charterer who is resident in that foreign country, the Comptroller shall determine the amount of such profits in such manner as may be substantially similar to that adopted by the tax authority of that foreign country.”.

Amendment of section 39

8. Section 39 of the principal Act is hereby amended —

(a)

by deleting paragraph (b) of subsection (1) thereof an substituting therefor the following: —

“(b)

a deduction, in respect of earned income, which shall be —

(i)	in the case of an individual not falling within sub-paragraph (ii) or (iii) or Hindu joint family, the sum of one thousand dollars or the amount of the earned income;
(ii)	in the case of an individual who, at any time in the year immediately preceding the year of assessment, was above fifty-five years of age but was not above sixty years of age, the sum of two thousand dollars or the amount of the earned income; and
(iii)	in the case of an individual who, at any time in the year immediately preceding the year of assessment, was above sixty years of age, the sum of three thousand dollars or the amount of earned income,

whichever is the less.”; and

(b)

by deleting the words “Government of any State or country or” appearing in the second and third lines of paragraph (e) of subsection (2) thereof.

New section 43B

9. The principal Act is hereby amended by inserting immediately after section 43A thereof the following section: —

“Special rate of tax for non-resident shipowner or charterer or air transport undertaking

43B. Notwithstanding the provisions of section 43 of this Act, where the tax authority of a foreign country taxes the profits derived by a person resident in Singapore from carrying on the business of a shipowner or charterer or of air transport at a rate which exceeds the rate prescribed by section 43 of this Act, the Minister may direct that the profits derived in Singapore from the carrying on of such business by a non-resident person who is resident in that foreign country be charged to tax at a rate similar to that charged by the tax authority of that foreign country.”.

Repeal and re-enactment of section 45

10. Section 45 of the principal Act is hereby repealed and the following substituted therefore: —

“Deduction and payment of tax in respect of interest paid to non-resident persons

45.—(1) Where a person is liable to pay to another person not known to him to be resident in Singapore any interest which is chargeable to tax under this Act, the person paying the interest shall deduct therefrom tax at the rate of forty per cent on every dollar of the interest and shall immediately give notice of the deduction of tax in writing and pay to the Comptroller the amount so deducted and every such amount shall be a debt due from him to the Government and shall be recoverable in the manner provided by section 90 of this Act:

Provided that —

(a)	the Comptroller may, as he things fit, allow any bank or financial institution to give notice of the deduction of tax and make payment of the amount so deducted within such other period and subject to such conditions as the Comptroller may determine;
(b)	the Comptroller may by notice in writing require any person who pays such interest to deduct and account for tax at a higher or lower rate than forty per cent on every dollar of such interest or permit such interest to be paid without deduction of tax.

(2) Where a person fails to make a deduction of tax which he is required to make under subsection (1) of this section any amount which he fails to deduct shall be a debt due from him to the Government and shall be recoverable as such.

(3) If the amount of tax which is required to be deducted under subsection (1) of this section is not paid to the Comptroller —

(a)	within seven days after payment of the interest from which the tax is to be deducted, a sum equal to five per cent of such amount of tax shall be payable; and
(b)	within thirty days after the payment of the interest from which the tax is to be deducted, an additional penalty of one per cent of such amount of tax shall be payable for each completed month that the tax remains unpaid, but the total additional penalty under this paragraph shall not exceed fifteen per cent of the amount of tax outstanding.

(4) Without prejudice to any other provision of this Act, if any person after deducting the tax required to be deducted under subsection (1) of this section fails to give notice of such deduction to the Comptroller within seven days after such deduction, he shall be guilty of an offence against this Act and shall on conviction pay a penalty equal to three times the amount of tax so deducted and shall also be liable to a fine not exceeding ten thousand dollars or to impreisonment for a term not exceeding three years or to both such fine and imprisonment:

Provided that where an individual has been convicted for three or more offences under this section the imprisonment he shall be liable to shall be not less than three months.

(5) The Comptroller may —

(a)	compound an offence under subsection (4) of this section and may before judgment stay or compound any proceedings thereunder; and
(b)	for any good cause remit the whole or any part of the penalty payable under subsection (3) of this section.

(6) For the purposes of this section —

(a)	the manager or principal officer of a company shall be answerable for doing all such acts, matters and things as are required to be done by the company under this section; and
(b)	interest shall be deemed to have been paid by a person to another person although it is not actually paid over to the other person but is reinvested, accumulated, capitalised, carried to any reserve or credited to any account however designated, or otherwise dealt with on behalf of the other person.”.

Amendment of section 99

11. Section 99 of the principal Act is hereby amended —

(a)	by inserting immediately after the word “under” appearing in subsection (1) thereof the expression “subsection (4) of section 45 or”; and
(b)	by inserting immediately after the word “sections” appearing in subsection (2) thereof the expression “45,”.

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