Speech by Mr. Louis Ng Kok Kwang, MP for Nee Soon GRC at the Second Reading of the Income Tax (Amendment) Bill [Bill no. 37/2018]
Sir, I stand in support of this Bill and would like to thank Minister for the proposed amendments, which will allow private-hire drivers to claim tax deductions for car-related expenses.
This is an issue I, along with several other members of this house have raised previously and I’m glad that we are leveling the playing field and ensuring that it is fair.
Sir, the Bill makes broad amendments as announced in the Budget 2018.
I would like to focus on three areas in particular. First, the extension of the tax deduction for qualifying donations. Second, the extension of the Business and IPC Partnership Scheme (BIPS). Lastly, IRAS’ enhanced enforcement powers.
Extension of tax deduction for qualifying donations
Section 37 will be amended to extend the 250% tax deduction for qualifying donations until December 2021. I would first like to declare my interest as the Chief Executive of ACRES, an IPC.
My interest notwithstanding, I support this extension in the spirit of giving and fostering a sense of community. Charities rely heavily on public donations, which empowers us to make a difference in the community. The donations are our lifeline and to be honest, fundraising remains a challenge for many of us.
With this extension of tax deduction, I believe we can encourage more Singaporeans to give and strengthen our community by donating more on issues we care about.
This deduction has been extended multiple times since it was first introduced as a temporary measure in 2009. Would the Minister consider formalising the deduction as a permanent measure after 2021? This would send a stronger statement of the Government’s commitment to support voluntary giving. It would also give the IPCs some greater assurance and stability.
Extension of Business and IPC Partnership Scheme
Next, Section 14ZB will similarly extend BIPS for another three years until December 2021.
BIPS complements the tax deduction for qualifying donations by encouraging employee volunteerism through businesses. Would the Minister similarly formalising the 250% deduction for business expenditure when employees volunteer and provide services to IPCs?
Would the Minister also consider extending the scope of BIPS? I have two suggestions on how the scheme might be expanded.
First, owners of the businesses such as sole-proprietors, partners and shareholders who are also directors of the same company are not qualifying employees under BIPS.
Can the Minister clarify the rationale for this exclusion and would the Minister consider extending BIPS to owners of businesses?
Business owners volunteering their own time and services can send a very strong message on the value of volunteerism to their employees.
Second, could BIPS be extended to charities that do not have IPC status?
IPC status allows charities to issue deductible receipts for qualifying donations to donors. As BIPS pertains to giving through acts of volunteerism rather than monetary donations, expanding the scheme to non-IPC charities would not blur the fundamental distinction between IPC and charities.
IPCs are rightfully held to a higher standard of compliance and governance, which not all charities have the resources to meet.
However, non-IPC charities continue to serve equally worthwhile causes and employees should be encouraged to volunteer with non-IPC charities as much as IPCs. In this regard, there does not seem to be good reason for drawing a distinction between the two.
Safeguards against abuse of power
Lastly, Clauses 2(b), 3, 41, 42, 45, 46, 47 propose to enhance IRAS’ powers to investigate tax crimes. I support the intention and agree with the need to take a whole-of-government approach to crack down on tax crimes given the increasing sophistication with which these crimes are carried out.
It is also stated that “These powers under the proposed amendments will be exercised only by trained IRAS investigation officers and where necessary so that investigations are not impeded.”
Could the Minister clarify what such training entails and share what safeguards are in place to prevent abuse of power by IRAS officers? Will these officers undergo training similar to what our police officers go through?
Sir, notwithstanding the above clarifications, I stand in support of this Bill.