Mr Speaker, Sir, I am moving the Second Reading of the Bill on behalf on my colleague, the Minister for Finance. Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the object of this Bill is to incorporate into the Income Tax Act the tax concessions which the Minister for Finance granted in last year's Budget Statement The opportunity is also taken to include, in the Bill, amendments which redefine tax terminology in order to remove ambiguity. The Bill also seeks to give the Comptroller additional powers to ensure prompt collection of taxes. In his Budget Statement in March 1976 my colleague, the Minister for Finance, announced that to continue to develop Singapore's financial centre and to promote the Asian Dollar Market, income received by Asian Currency Units for advising, confirming or re-financing off-shore letters of credit will be taxed at the reduced rate of 10% instead of the normal 40%. That tax concession is now given effect under clause 7. The Minister also announced in his Budget Statement in February of this year that the basis of the tax on pensions would be revised. Members may be aware that a pension payment, like the annuity paid by insurance companies, can be treated as consisting of two elements, one element being part repayment of the capital, and the other interest on the capital. At present, both elements are subject to income tax. Clause 3 provides that only the interest portion will be treated as income and taxed accordingly; for purpose of assessment the interest element is calculated at one-half of the pension. This concession applies to all pensions set up by law in Singapore as well as to approved pensions. I now deal with the other amendments. The present definition of source of income does not cover interest accruing from suppliers' credit or deferred payments for the sale of goods, royalties and other payments for the use of movable property, management fees, payments for the use of scientific, technical, industrial or commercial knowledge or information, and rents or payments under agreement for the use of movable property. Clause 4 provides that where these are paid directly or indirectly by a Singapore resident or a permanent resident in Singapore, or are deductible against income accruing in Singapore, the source is deemed to be in Singapore and therefore liable to income tax. Clause 5 of the Bill lifts the restriction on the exemption from income tax, in respect of interest received from Asian Dollar bonds, to issues emanating in Singapore. Henceforth, all approved Asian Dollar Bond issues are tax exempt, whether issued within or outside Singapore. The present law allows a taxpayer to claim relief for maintenance of his dependants who reside with him outside Singapore. Clause 6 now restricts the tax relief to the taxpayer whose dependants are living with him in Singapore. Clause 8 provides for the deduction of withholding tax on royalties and management fees paid to non-residents similar to that provided in the Act regarding payment of interest to non-residents. The rate of withholding tax is 40% although the Comptroller has the discretion to give notice to make deductions at a higher or lower rate, where appropriate. Clause 10 of the amendment provides for full or partial exemption of income under double taxation agreements. Any income so exempted under a double taxation agreement will be taken into account in determining the effective tax rate to be applied to other income in respect of which tax is payable. The present system of granting double taxation relief can in certain cases result in less tax being collected, because of a large foreign income, than would have been the case had there been no foreign income. Clause 11 now rectifies this anomalous situation. It provides for any tax credit allowed under the double taxation agreement not to have the effect of reducing the tax payable on any source of income derived from Singapore. Income tax for the year of assessment is based on the income of the preceding year. There is therefore a time lag. In the case of a business or trade whose accounting period ends in the early part of the year, the deferment of tax payment is even longer. Indeed some businesses choose the early part of the year as the end of the accounting period to take advantage of this provision. To prevent such abuse, clause 12 imposes an obligation that where the accounting period of a business or trade ends on or before 30th September, an estimate of the tax should be given to the Comptroller within three months after the end of the accounting period to assist the Comptroller in raising an advance assessment without undue delay. Another amendment, clause 15, vests the Comptroller with reciprocal right to apply to the Board of Review or High Court for appeal cases to be heard in public instead of in camera. Hitherto, only taxpayers can make such an application. The final amendment as contained in clause 16 makes it the employer's responsibility to ensure that the amount deducted from the emoluments of the employee for purpose of payment of income tax is forwarded to the Comptroller not later than ten days after the date of such deduction. There have been occasions when employers deliberately delayed the remittance of tax so deducted. Sir, I beg to move. Question proposed. 3.35 p.m.