Clause 11

by inserting, immediately after the word “society” in the second line of subsection (1)(e), the words “or any pension or provident fund constituted outside Singapore”;

by inserting, immediately after the words “Provided that” in the proviso to subsection (1)(e), the following words:“in the case of any contribution to the Central Provident Fund or any approved pension or provident fund designated by the Minister under section 39(6)(c)”;

by inserting, immediately after the words “1st July 1992” in sub-paragraph (i)(M) of the proviso to subsection (1)(e), the words “and before 1st July 1993”;

by deleting the comma at the end of sub-paragraph (i)(M) of the proviso to subsection (1)(e) and substituting a semi-colon, and by inserting immediately thereafter the following sub-paragraph:“(N)commencing on or after 1st July 1993 shall not exceed 181/2%”; and

by deleting subsection (2) and substituting the following subsection:“(2) Notwithstanding subsection (1), payments made by way of compensation for injuries or death, salaries, wages or similar emoluments or death gratuities to an employee (or his legal representative) who is the husband, wife or child of —

any employer;

any partner of the firm in which that employee is employed;

any individual who by himself or with his spouse or child or all of them have the ability to control directly or indirectly the company in which that employee is employed; or

any individual whose spouse or child or all of them have the ability to control directly or indirectly the company in which that employee is employed,shall be allowed as deductions only to the extent to which, in the opinion of the Comptroller, they are reasonable in amount having regard to the services performed by that employee.”; and

by inserting, immediately after subsection (4), the following subsections:“(5) Notwithstanding subsection (1), medical expenses falling within that subsection incurred by any employer (other than an employer who derives any income from any trade, business, profession or vocation which is wholly or partly exempt from tax or subject to tax at a concessionary rate of tax under this Act or the Economic Expansion Incentives (Relief from Income Tax) Act [Cap. 86]) shall not be allowed as deductions to the extent specified in the following provisions:

in the case of an employer who incurred medical expenses in the basis period for the year of assessment 1992 amounting to 2% or less of the total remuneration of his employees for that basis period, or in the case of an employer who commences any trade, business, profession or vocation during or after the basis period for the year of assessment 1993, any amount of the medical expenses incurred by such employer in excess of 2% of the total remuneration of his employees in the basis period for the year of assessment 1994 and for any subsequent year of assessment shall not be allowed as deductions; and

in the case of an employer who incurred medical expenses in the basis period for the year of assessment 1992 exceeding 2% of the total remuneration of his employees for that basis period, any amount of medical expenses incurred by such employer in excess of the relevant amount for any year of assessment shall not be allowed as deductions for that year of assessment.(6) Where, in the basis period for any year of assessment, any employer derives any income from any trade, business, profession or vocation which is wholly or partly exempt from tax or subject to tax at a concessionary rate of tax under this Act or the Economic Expansion Incentives (Relief from Income Tax) Act [Cap. 86] and incurs medical expenses in excess of —

2% of the total remuneration of his employees in that basis period, as if he were an employer referred to in subsection (5)(a); or

the relevant amount for that year of assessment, as if he were an employer referred to in subsection (5)(b),an amount equal to the excess medical expenses shall be deemed to be income of the employer chargeable to tax at the rate of tax under section 42(1) or 43 (1), as the case may be, for that year of assessment.(7) The references to medical expenses in subsections (5) and (6) shall be read as references to medical expenses which would but for subsection (5) be allowable as deductions under this Act.(8) For the purposes of subsections (5) to (7) —“medical expenses” means expenses incurred in or in connection with the provision of medical treatment and includes —

expenses incurred in or in connection with the provision of maternity health care, natal care, and preventive and therapeutic treatment;

expenses incurred in or in connection with the provision of a medical clinic by the employer;

cash allowance in lieu of medical expenses; and

expenses incurred in or in connection with the provision of insurance against the cost of medical treatment;“medical treatment” includes all forms of treatment for, and procedures for diagnosing, any physical or mental ailment, infirmity or defect;“relevant amount” means —

in relation to the year of assessment 1994, 4% or the specified percentage of the total remuneration of the employees in the basis period for the year of assessment 1994, whichever is the less;

in relation to the year of assessment 1995, 3.5% or the specified percentage of the total remuneration of the employees in the basis period for the year of assessment 1995, whichever is the less;

in relation to the year of assessment 1996, 3% or the specified percentage of the total remuneration of the employees in the basis period for the year of assessment 1996, whichever is the less;

in relation to the year of assessment 1997, 2.5% or the specified percentage of the total remuneration of the employees in the basis period for the year of assessment 1997, whichever is the less;

in relation to the year of assessment 1998 and every subsequent year of assessment, 2% of the total remuneration of the employees in the basis period for the year of assessment 1998 or that subsequent year of assessment, as the case may be;“remuneration” means any wage, salary, leave pay, fee, commission, bonus, gratuity, allowance, other emoluments paid in cash by or on behalf of an employer and contributions to any approved pension or provident fund by any employer which are allowable as deductions under this Act, but does not include any director’s fee, medical expense, cash allowance in lieu of medical expenses and benefit-in-kind;“specified percentage” means the percentage arrived at by dividing the amount of medical expenses incurred in the basis period for the year of assessment 1992 by the total remuneration of the employees in that basis period.”.