S'pore gives tax breaks to boost trade<\/p>\n
SINGAPORE (Reuter): Singapore yesterday offered a tax relief
\npackage to boost its attraction as the region's financial hub but
\nkept corporate and personal taxes unchanged.<\/p>\n
Finance Minister Richard Hu unveiled in his budget speech for
\n1997\/98 fresh tax incentives for fund management, stocks,
\ncommodity trading and offshore debt issues.<\/p>\n
\"We will continue to give priority to investments in
\ninfrastructure and ensure that our tax rates are competitive,\" he
\ntold Parliament.<\/p>\n
He said the financial sector was a key area of the economy,
\ncontributing 12 percent to gross domestic product.<\/p>\n
Among the relief measures, fund managers with substantial
\noperations in Singapore could qualify to be exempted from income
\nearned from non-resident funds.<\/p>\n
Fund managers handling at least Singapore $10 billion (US$7
\nbillion) of non-resident funds, employing at least seven
\nprofessionals and analysts and operating for three years under
\nSingapore's tax exemption for fund managers scheme, could
\nqualify.<\/p>\n
He would cut the tax rate for fund managers managing more than
\nSingapore $5 billion of non-resident funds to five percent on
\nincremental income earned.<\/p>\n
Fund managers previously enjoyed a concessionary 10 percent
\ntax rate on income earned from managing non-resident funds.<\/p>\n
These measures would encourage them to expand their business
\nin Singapore and to use the city-state as a regional hub.<\/p>\n
Hu also announced tax incentives for Asian Currency Unit (ACU)
\nactivities.<\/p>\n
Banks and merchant banks are now taxed at a concessionary rate
\nof 10 percent on income earned from such activities.<\/p>\n
He announced a further reduction in the tax rate to five
\npercent on the incremental income derived from certain high value
\nactivities, provided the taxable income of some of these
\nactivities exceeds S$10 million.<\/p>\n
Hu said the five percent tax on incremental income would be
\nextended to income derived from all taxable ACU activities, if
\nthe figure exceeded S$50 million.<\/p>\n
This new incentive would be granted for an initial five-year
\nperiod with effect from the 1998 year of assessment.<\/p>\n
Further, Hu said the Singapore Commodity Exchange (SICOM)
\nwould enjoy a five year tax holiday extension.<\/p>\n
The package further relaxed the terms of its overseas
\nenterprise incentive (OEI) scheme to encourage more companies to
\ninvest in the region.<\/p>\n
To boost stock and debt markets, Hu said banks would not be
\ntaxed on income earned from managing initial public offerings of
\nforeign currency denominated shares for an initial period of five
\nyears, effective from 1998.<\/p>\n
To encourage borrowers to issue bonds and other debt
\nsecurities, he said all fees earned by financial institutions in
\narranging offshore debt issues would be exempted from tax.<\/p>\n
In contrast to last year, the budget package did not offer
\nacross-the-board tax rate cuts for corporations and individuals.<\/p>\n
\"We reduced our corporate tax and personal income tax rates
\nlast year. The lower rates will take effect from the year of
\nassessment 1997, there is therefore no need to make further
\nadjustments to these tax rates so soon after the last revision,
\nHu said.<\/p>\n
He added that Singapore's tax rates were already among the
\nlowest in the world.<\/p>\n
The minister, however, offered a once-off across the board
\npersonal tax rebate of 10 percent on individual income tax.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/spore-gives-tax-breaks-to-boost-trade-1447893297",
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