Round Up Speech by MOS Low Yen Ling at the Second Reading of the Economic Expansion Incentives (Relief from Income Tax)(Amendment) Bill 2022

1. Mr Speaker, I thank Members Mr Don Wee and Assoc Prof Jamus Lim for their support of the Bill and the opportunity to make some clarifications.

2. I would like to assure the two Members that MTI, MOF and the agencies routinely review the effectiveness of our incentives to make the necessary adjustments, such as extending the validity of the scheme, or to adjust the scheme parameters. These are typically announced by the Minister for Finance at Budget, following which agencies then work with AGC to draft and introduce the legislative amendments. Incentive applications during the intervening period may be awarded retrospectively if the legislative amendments are backdated to the announced start date. In this instance, the amendments are being backdated to 1 April 2021, which was the previously announced start date of the IA-ER.

3. With the expanded scope of the IA-ER and increased attention that companies are placing on their own carbon footprint, we expect great interest in the scheme going forward.

4. Mr Don Wee asked whether the IA-ER scheme could be extended to 2030 to align with the Singapore Green Plan 2030, how our incentives can help businesses fulfil the aims of the Singapore Green Plan 2030, and whether additional support could be provided.

5. I would like to assure Mr Don Wee and Assoc Prof Jamus Lim that the IA-ER is part of a comprehensive suite of measures to support industries and companies based in Singapore in their decarbonisation journey, and better position themselves to seize the opportunities in the green economy. Other incentives and schemes include the Resource Efficiency Grant for Energy, Energy Efficiency Fund, the $180m Enterprise Sustainability Programme, and Low-Carbon Energy Research Funding Initiative.

6. Many of these schemes were only recently launched. We will work with the various ministries, including MSE, MOF and the relevant agencies, to monitor their progress and review them regularly to ensure that, collectively, they remain relevant and effective in supporting our industries and companies in their decarbonisation journey, and Singapore’s climate goals. We will similarly review the IA-ER scheme at an appropriate juncture to determine whether to extend it further or adjust its scheme parameters.7. Mr Don Wee also asked how the Government is helping our industries build their capabilities to meet our “30-by-30” goal. Assoc Prof Jamus Lim also recapped a list of proposals, including those to encourage households to reduce their carbon footprint. The Ministry of Sustainability and Environment (MSE) will provide an update at next month’s Committee of Supply debate.

Assignment of Functions or Powers from Minister for Trade and Industry to Public Bodies

8. Assoc Prof Jamus Lim also asked about the introduction of a new Section 3A of the Bill which allows the Minister for Trade and Industry to assign to public bodies various functions and powers of the administration of tax incentives under the Act. These public bodies refer to government agencies such as the Economic Development Board (EDB) and Enterprise Singapore (ESG) which administer economic-expansion related tax incentives. I want to assure Assoc Prof Jamus Lim that MTI also shares his wish to remain pro-business when administering the tax incentives; that is in fact why we are introducing this amendment, which will provide EDB and ESG with more autonomy and agility to anchor key investments and projects expediently. This is also in line with the existing practice where public bodies administer tax incentives via delegations made under the Interpretation Act.

9. I wish to thank Mr Don Wee and Assoc Prof Jamus Lim for their questions and keen support.

Conclusion

10. Mr Speaker Sir, the Government is committed to fostering a business-friendly environment in Singapore. We will continue to review and sharpen our tools to help our businesses move towards a low-carbon future, and we look forward to the continued support of this House in that endeavour. Thank you.