SINGAPORE - Stamp duties will be levied on electronic records that effect a transfer of interest in properties and shares, under a law passed by Parliament on Monday (Sept 10).
This comes with the pervasive use of digital technology and potential for more transactions to be effected electronically, said Second Minister for Finance Lawrence Wong when he put the Stamp Duties (Amendment) Bill for debate in the House.
"Currently, such transfers are done via physical records, and stamp duty is levied where applicable," he said on Monday. "(The Bill) will ensure that our legislation keeps pace with digitalisation, and safeguard Singapore's revenue where transfers are effected without a physical instrument."
With changes to the Stamp Duties Act, the Minister for Finance may also recover interest from taxpayers who fail to comply with the conditions of their stamp duty remission.
"Such cases mainly involve housing developers. They are granted upfront remission of the Additional Buyer's Stamp Duty for their purchase of land for housing development," said Mr Wong.
The key terms of remission conditions require developers to commence, complete and sell the development in a specified timeframe. If they fail to do so, the stamp duty earlier remitted will be recovered with interest, Mr Wong added.
The interest compensates the Government for the opportunity cost of the duties it would have received, had the remission not been granted, he said.
With the new law, the Inland Revenue Authority of Singapore can also make changes to the administration of its e-stamping system, without having to seek the minister's approval each time. This system is an online portal for taxpayers to declare and pay stamp duties.
Speaking in support of the Bill on Monday, Mr Louis Ng (Nee Soon GRC) noted that last year, stamp duty comprised some 7 per cent of all taxes collected. "In a time of rising social and healthcare spending, it is important that we secure this revenue base," he said.
But he sought clarification on the legality of blockchain-based property dealers.
"Young digital firms have shown that they can bring excitement to Singaporeans but also headaches for regulators, as we have seen with the likes of Grab," he said, referring to the private-hire car service. "Taking a proactive approach, especially where Singaporeans' nest eggs are concerned, may be worthwhile."
Mr Wong replied that the Government recognises the rapid pace of technological development in both the finance industry and property market, noting the benefits of greater legal clarity when new technology is involved.
"That's why government agencies are separately studying the legislative framework for electronic transactions in Singapore, as well as how best to streamline and digitalise property transaction processes," he added, noting that there is an ongoing review of the Electronic Transactions Act.