Lawmakers in Singapore are urging the government to cut tax for local corporate investors wishing to invest in real estate investment trusts (REITS) in order to put them on an equal footing with their foreign counterparts.
In his 2005 budget speech, Prime Minister and Minister of Finance, Lee Hsien Loong announced that foreign non-individual investors would be encouraged to invest in the Singapore property market with a proposed reduction in the withholding tax on REIT distributions to 10% from 20%, for a period of five years.
Additionally, to attract more REIT listings, the government wants to waive stamp duty on the instruments of transfer of Singapore properties into REITs to be listed, or already listed on the SGX, for a five-year period.
However, in the parliamentary debate on the budget on Tuesday, it was reported by Channel News Asia that some members branded the tax cut for foreigners unfair on local investors, who will still be obliged to pay the 20% withholding tax on REIT distributions.
As a result, some legislators have urged the government to cut the tax to the
same rate applicable to foreign investors.
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