Mr Speaker, I would like to speak briefly on the maritime-related amendments in this Bill, in particular Clauses 3, 5 and 6 concerning sections 10, 13A and 13E of the Income Tax Act.
At the outset, I declare that I am a Consultant in a law firm that specialises in shipping and maritime legal matters.
My understanding is that these amendments are intended to streamline and consolidate the tax treatment of approved international shipping enterprises. In particular, certain income currently exempted under section 13A will, from Year of Assessment 2027, be exempted under section 13E instead, with related transitional provisions dealing with capital allowances, balancing charges and losses. These amendments appear intended to ensure continuity in the operation of the exemption regime while simplifying its legislative structure.
As someone who has worked in the maritime sector, I support efforts to simplify and rationalise Singapore's shipping tax regime. Clarity, certainty and predictability are important considerations for international shipowners, operators, financiers and investors when deciding where to locate their commercial operations, management functions and strategic decision-making activities.
Mr Speaker, while these amendments appear to consolidate the tax treatment of approved international shipping enterprises under section 13E, it would be useful if the Minister could explain the policy rationale for this restructuring. What advantages does the Government expect from administering these exemptions principally through section 13E rather than across both sections 13A and 13E?
More broadly, these amendments provide an opportunity to reflect on the importance of Singapore's maritime tax incentives in an evolving global landscape. Singapore competes not only for shipping tonnage and maritime business, but also for the high-value functions that surround it. These include commercial management, chartering, cargo and freight operations, logistics, ship finance, marine insurance, shipbroking, arbitration and maritime legal services.
The success of Singapore as an international maritime centre depends not merely on ships calling at our port, but on our ability to attract and retain these high-value maritime businesses and activities in an increasingly competitive international environment.
In that regard, I have three broader policy questions for the Minister.
First, on global competitiveness. As international tax and regulatory frameworks continue to evolve, how does the consolidation of these shipping tax provisions under section 13E support Singapore's continued competitiveness as an international maritime centre relative to other leading maritime hubs such as London, Dubai and Hong Kong?
Second, on effectiveness. Could the Government share updated information on the effectiveness of Singapore's principal maritime tax incentive schemes? Specifically, what is the estimated annual tax revenue forgone under these schemes, and what measurable outcomes have they generated in terms of Singaporean employment, business spending and the anchoring of maritime management and commercial functions in Singapore? Has the Government studied the net benefits of these incentives, taking into account both the revenue forgone and the economic value created? If so, could the Minister share the key findings? If not, would the Government consider doing so, so that Parliament can better assess whether these incentives remain appropriately calibrated and continue to deliver good value for Singapore?
Such an assessment would also help inform how our maritime incentive framework should evolve to meet the industry's changing needs.
Third, on the future of Singapore as a global maritime hub. As the maritime industry undergoes decarbonisation and digital transformation, is the Government considering future enhancements to Singapore's maritime tax incentive framework that would further support green shipping initiatives, innovation, digitalisation and the development of Singaporean maritime talent?
The answers to my questions would also help Parliament better assess the contribution of these incentives to Singapore's continued position as a leading international maritime centre and the long-term value they create for Singapore and Singaporeans.
Mr Speaker, notwithstanding the clarifications I have sought, I support the Bill.
