MOF seeks comments on proposed amendments to Income Tax Act 1947 to effect Budget 2024 changes

25 June 2024

On 10 June 2024, the Ministry of Finance (“MOF”) published a consultation paper seeking comments on a draft Income Tax (Amendment) Bill 2024 which, if passed into law, will effect tax measures announced in the 2024 Budget Statement on 16 February 2024 as well as changes arising from MOF’s periodic review of Singapore’s income tax regime to better reflect policy objectives and improve tax administration. The consultation closes on 5 July 2024.

MOF is expected to publish in September 2024 a summary of the main comments received along with MOF’s responses.

Budget 2024 amendments

The key amendments to effect measures announced in the 2024 Budget Statement include the following:

  • Corporate income tax (“CIT”) rebate with a CIT rebate cash grant for eligible companies: To help companies manage rising costs, a CIT rebate of 50% of tax payable will be granted for Year of Assessment (“YA”) 2024. As companies which are not profitable may not benefit from the CIT rebate, companies that have employed at least one local employee in 2023 will receive a minimum benefit of S$2,000 in the form of a cash payout. The maximum total benefit that a company may receive is S$40,000.
  • Refundable Investment Credit (“RIC”): The RIC will be introduced to enhance Singapore’s attractiveness for investments. The RIC encourages companies to make sizeable investments that bring substantive economic activities to Singapore in key economic sectors and new growth areas. The RIC will support up to 50% of qualifying expenditures for qualifying activities on an approval basis. The credits are to be offset against CIT payable. Any unutilised tax credits will be refunded to the company in cash within four years.
  • Personal income tax (“PIT”) rebate: A PIT rebate of 50% of tax payable will be granted to all tax resident individuals for YA 2024. The rebate will be capped at S$200 per taxpayer.
  • Overseas Humanitarian Assistance Tax Deduction Scheme (“OHAS”): To encourage giving towards overseas emergency humanitarian assistance causes, the OHAS will be piloted for four years from 1 January 2025 to 31 December 2028. The OHAS will provide individual and corporate donors with 100% tax deduction for qualifying overseas cash donations made through a designated charity and towards a fundraiser for emergency humanitarian assistance with a valid Fund-Raising for Foreign Charitable Purposes permit from the Commissioner of Charities. Tax deductions under the OHAS will be capped at 40% of the donor’s statutory income.

Other proposed amendments

The proposed amendments to better reflect policy objectives and to improve tax administration include:

  • changes to expand the scope of qualifying securities lending or repurchase arrangements under section 10H of the Income Tax Act 1947, and
  • changes to waive the requirement to furnish the Estimated Chargeable Income for individual sole-proprietors and partnerships from YA 2026 to YA 2030.

Reference materials

The following materials are available on the MOF website www.mof.gov.sg: