SINGAPORE - The Ministry of Finance is seeking public feedback on some proposed changes to the Income Tax Act.
The suggested amendments relate mainly to announcements made in the Government's Budget statement earlier this year, which include extending the Productivity and Innovation Credit (PIC) scheme by three years to 2018, the introduction of the PIC+ scheme and extending research & development tax measures.
The PIC scheme gives companies tax deductions for making investments that boost their productivity, while PIC+ raises the expenditure cap for tax deduction from $400,000 to $600,000 per qualifying activity per year.
The changes to the Act also include some refinements to existing tax policies and tax administration, arising from ongoing reviews of Singapore's income tax system, the MOF said.
For example, the MOF plans to introduce new measures to curb the abuse of the PIC scheme.
The Inland Revenue Authority of Singapore, which administers the scheme, has come across "business arrangements aimed at artificially creating or inflating PIC claims", the MOF said.
To curb such cases, the MOF has proposed three measures, including imposing penalties on intermediaries who promote or facilitate claims for PIC benefits for such abusive arrangements.
Another suggested refinement is to allow Supplementary Retirement Scheme members to withdraw their SRS investments without liquidating the investments.
This will reduce the transaction costs they incur for withdrawals. The SRS investments will be valued and taxed in the same manner as when the SRS investments are liquidated for cash withdrawal.