Friday, August 28, 2009

Tax proposals on property: MOF replies

TUESDAY'S editorial, 'About the 'right' property behaviour tax', was wrong on the facts of the recent public consultation on income tax treatment for individuals who sold their properties.
There was no proposal that had the effect of 'making more property deals taxable'. The proposed change was not aimed at doing so, and would not have resulted in more individuals having to pay income tax on gains from selling their properties.

The proposed change, following feedback received over the years, had sought to provide certainty of non-taxation for one group of individual owners (those who had not sold any other property in the preceding four years) without any implications for taxation of other individuals.
For all these other cases, whether the gains from a property sale are subject to income tax would have continued to depend on the facts and circumstances of the case - as has been the longstanding practice of the tax authorities in Singapore as well as many other jurisdictions.

The editorial's musings on whether the Ministry of Finance (MOF) should even have asked people whether they wanted to be 'taxed more', were, therefore, misplaced. There was no proposed tightening of the income tax treatment for individuals who sell their properties, or greater likelihood that they would be brought to tax.

This was explained clearly in the MOF's statement during the public consultation itself, reiterated recently, and carried in The Straits Times' own reports on the matter.
Following the consultation, MOF decided not to proceed with the proposed change for individuals who sell no more than one property during a four-year period.

While it was desirable to provide certainty of non-taxation to such individuals, there was no neat way of doing so without creating new distortions.


Source, Straits Times, 28 Aug 2009

No comments:

Post a Comment