Good morning, Ladies and Gentlemen.

I am pleased to join you today at the Budget Seminar 2012.

The annual Budget Seminar is one of the signature events organised by the Tax Academy of Singapore, bringing together the policy makers from Ministry of Finance and tax specialists from IRAS to provide insights into the tax changes announced by the Minister for Finance in his Budget Statement. I am happy to note that this year, we also have a distinguished line-up of economists, business representatives and tax practitioners who will share their perspectives on the Budget, the economic and business outlook, as well as the challenges ahead of us.

Productivity as a Key Driver of Sustainable Economic Growth

Anchored on the theme “An Inclusive Society, A Stronger Singapore”, Budget 2012 is a Budget about securing Singapore’s longer-term future. Minister introduced several tax measures to help Singapore stay competitive and help businesses transform through innovation and productivity improvements. It is hoped that these measures would help us achieve productivity growth of 2 to 3% per year over a decade, build competitive enterprises and sustain economic growth at 3 to 5% per annum.

Simplifying Tax Filing for Taxpayers, Facilitating a Pro-Business Environment & Raising Productivity

In IRAS, we have committed ourselves to fostering a competitive tax environment that encourages enterprise and supports economic growth. We regularly review our tax policies to ensure that they are pro-enterprise and do not impose undue compliance burden on businesses. We constantly seek new and innovative ways to simplify our tax rules, systems and processes, so that we can reduce taxpayers’ costs of compliance and improve their productivity.

Over the years, we have introduced significant changes to simplify filing for taxpayers. Tax filing is now a breeze for individuals who do not need to file a tax return under the No-Filing Service. Others enjoy the ease and convenience of e-Filing their Individual Income Tax returns and having their income or donation information pre-filled in their returns.

I am pleased to announce today that we will be taking these efforts to the next level by simplifying tax filing for small companies as well. We recognise that small companies face greater challenges in managing their tax obligations. Their resources are already highly stretched, as they struggle just to keep up with their day-to-day operations and focus on business viability.

It is with this in mind that we are simplifying the reporting requirements for Estimated Chargeable Income and the filing of Income Tax Return, Form C, for small companies so as to reduce their compliance burden.

ECI Filing Waiver for Companies with Turnover Not Exceeding $1 Million

Currently, all companies have to report their Estimated Chargeable Income, or “ECI” for short, within 3 months of the end of their financial year end. Companies without any taxable profit and have no ECI are also required to do so. We intend to reduce compliance requirements for small companies with turnover not exceeding $1 million and with no ECI. They will no longer need to file the ECI. The waiver will take effect from Year of Assessment 2013 for companies with accounting year ending October 2012 or after. With this change, 67,000 companies, or about 42% of all companies would not need to file their ECI, saving them one step in the overall corporate tax filing requirements.

We have set a threshold of S$1 million turnover to manage the revenue-at-risk, so that larger companies will continue to report their ECI and pay their taxes within the current time-frame.

We will be releasing more implementation details later in the year.

Form C-S, a Simplified Income Tax Return for Companies

Compared to larger companies, small companies have less complex transactions, fewer tax claims and fewer tax adjustments. From this year, the Year of Assessment 2012, small companies with an annual turnover not exceeding S$ 1 million dollars will find tax filing much faster and easier with the Form C-S, a new simplified income tax return for small companies. About 110,000 small companies, which constitute 70% of all companies, will benefit from the Form C-S as only essential tax and financial information that are most relevant to them are required in Form C-S. They will now spend only 10 minutes to complete Form C-S, or half the average time taken to complete Form C. Companies that electronically file the Form C-S will also enjoy a later e-Filing due date of 15th December, instead of 30th November for paper filing.

I am heartened to share that the Form C-S is not just an IRAS initiative. It is the culmination of a strong partnership with businesses, tax practitioners and industry stakeholders, including members of our Taxpayer Feedback Panel and Focus Groups. You have given us great ideas and supported us along the way. I would like to thank all of you for your valuable contributions and for partnering us in our continuous journey of fostering a pro-business environment.

IRAS firmly believes that the two initiatives announced today will result in a significant reduction in time and effort spent on tax filing for smaller companies, thereby helping to improve their productivity and leading to greater efficiency for the tax system as a whole. We will continue to seek innovative ways to help more companies minimise their compliance costs and enjoy a better overall filing experience.

Finally let me wish all of you a fruitful Seminar and an engaging session with our panel members. Thank you.