http://www.straitstimes.com/archive/...-govt-20140528

$94m worth of property taxes exempted by Govt

Published on May 28, 2014 1:50 AM

By Hoe Pei Shan


ABOUT $94 million in property tax was exempted by the Government last year. This is almost four times the $25 million in 2000, and believed to be a record.

The Inland Revenue Authority of Singapore (Iras), which provided the figures, said properties which are eligible for tax exemption under the Property Tax Act fall broadly into two categories.

They are either places of religious worship such as churches, temples and mosques, or buildings "fulfilling purposes conducive to social development", including community clubs and sports premises.

The second category is "limited to public facilities that directly benefit the public at large", an Iras spokesman said.

The number of properties granted tax exemptions has risen since 2000, when 650 buildings were granted full or partial property tax exemptions. This averages out to about $38,400 in taxes uncollected for each property.

Last year, this leapt to almost $96,000 for each of the 980 buildings exempted.

This suggests that higher property values - as opposed to more exemption grants - are behind the steep increase in taxes exempted, said PropNex chief executive Mohamed Ismail.

"In the last decade or so, property prices have gone up multifold... with values driven up by demand and supply, and the increase in population," he said.

"We are land scarce, and those who want land have to constantly compete with someone who is willing to pay top dollar, so there will be an increase in land prices, and as land prices go up, so will property values and the taxable amounts."

Iras could not give more details on which buildings were exempted from property tax last year, citing confidentiality.

Two such applicants which were willing to speak to The Straits Times shared data that corresponded with Mr Ismail's view about rising property values being behind the hike in dollar amounts of taxes exempted.

The Lutheran Church in Singapore has five churches granted exemptions under religious use. It has not been able to afford land purchases in the last 30 years, even as more have joined the church, said Bishop Terry Kee.

The Majlis Ugama Islam Singapura (Muis), also known as the Islamic Religious Council of Singapore, has similarly maintained 69 mosques since 2000, despite a growing congregation, said a spokesman.

Around $476 million was collected in property taxes from places of religious worship, clubs, garages and other land not used for commercial, industrial or residential purposes in the financial year ending March 2013.

Iras said it "conducts regular audits on properties granted property tax exemption using a risk- based approach". It "will verify the information provided to ensure that the applicants meet the necessary criteria".

The authority said "less than 10 applicants have had their exemption status fully or partially revoked as a result of our audits" since 2000.

It could not provide specific examples of applicants which have abused the exemption grants.

But it did say that a charity which originally declared it would use a property for religious purposes, for instance, but was found during checks to have used it for commercial purposes, would have that tax exemption revoked.

Anyone who furnishes information which he knows or believes to be false in any application made under the Property Tax Act "shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and/or to imprisonment for a term not exceeding six months".

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