Clause 10

Where a person is liable to pay to another person not known to him to be resident in Singapore any interest which is chargeable to tax under this Act, the person paying the interest shall deduct therefrom tax at the rate of forty per cent on every dollar of the interest and shall immediately give notice of the deduction of tax in writing and pay to the Comptroller the amount so deducted and every such amount shall be a debt due from him to the Government and shall be recoverable in the manner provided by section 90 of this Act:Provided that —

the Comptroller may, as he things fit, allow any bank or financial institution to give notice of the deduction of tax and make payment of the amount so deducted within such other period and subject to such conditions as the Comptroller may determine;

the Comptroller may by notice in writing require any person who pays such interest to deduct and account for tax at a higher or lower rate than forty per cent on every dollar of such interest or permit such interest to be paid without deduction of tax.(2) Where a person fails to make a deduction of tax which he is required to make under subsection (1) of this section any amount which he fails to deduct shall be a debt due from him to the Government and shall be recoverable as such.(3) If the amount of tax which is required to be deducted under subsection (1) of this section is not paid to the Comptroller —

within seven days after payment of the interest from which the tax is to be deducted, a sum equal to five per cent of such amount of tax shall be payable; and

within thirty days after the payment of the interest from which the tax is to be deducted, an additional penalty of one per cent of such amount of tax shall be payable for each completed month that the tax remains unpaid, but the total additional penalty under this paragraph shall not exceed fifteen per cent of the amount of tax outstanding.(4) Without prejudice to any other provision of this Act, if any person after deducting the tax required to be deducted under subsection (1) of this section fails to give notice of such deduction to the Comptroller within seven days after such deduction, he shall be guilty of an offence against this Act and shall on conviction pay a penalty equal to three times the amount of tax so deducted and shall also be liable to a fine not exceeding ten thousand dollars or to impreisonment for a term not exceeding three years or to both such fine and imprisonment:Provided that where an individual has been convicted for three or more offences under this section the imprisonment he shall be liable to shall be not less than three months.(5) The Comptroller may —

compound an offence under subsection (4) of this section and may before judgment stay or compound any proceedings thereunder; and

for any good cause remit the whole or any part of the penalty payable under subsection (3) of this section.(6) For the purposes of this section —

the manager or principal officer of a company shall be answerable for doing all such acts, matters and things as are required to be done by the company under this section; and

interest shall be deemed to have been paid by a person to another person although it is not actually paid over to the other person but is reinvested, accumulated, capitalised, carried to any reserve or credited to any account however designated, or otherwise dealt with on behalf of the other person.”.