PUB not obliged to pay higher land tax on Johor waterworks: Shanmugam

SIAU MING EN Today Online 18 Aug 15;

SINGAPORE — National water agency PUB is not obliged to pay the higher land assessment tax that the Johor authorities are seeking to levy on Singapore’s waterworks in Kota Tinggi, and the issue has been raised with Malaysian leaders, said Foreign Affairs Minister K Shanmugam.

The Kota Tinggi District Council issued a notice late last year that sought to double the rate of the land assessment tax imposed on the Johor River Water Works, Singapore’s Parliament was told today (Aug 18). The revised rate is more than twice that of the next highest rate, added Mr Shanmugam, who is also Law Minister.

The facility extracts and treats up to 250 million gallons of water a day from the river, in accordance with terms set out under the 1962 water agreement between the two countries.

Mr Shanmugam also said the assessed property value of the waterworks was increased and the new rate was applied to a category that was “created solely for the PUB”.

Responding to a question from Mr Sitoh Yih Pin, Member of Parliament for Potong Pasir SMC, on the status of the land assessment tax applicable to the PUB’s waterworks in Johor, Mr Shanmugam said: “The PUB’s operations in Johor are governed by the 1962 Water Agreement. That agreement governs what the PUB has to pay, and the PUB is not obliged to pay the land assessment tax that has been sought to be imposed.”

Under the 1962 water agreement — which expires in 2061 — Singapore buys raw water from Malaysia and, in turn, Malaysia buys treated water from the Republic.

Mr Shanmugam added: “There is some additional background on the Johor authorities imposing such taxes in the past. For present purposes, I do not propose to go into what had happened in the past.”

On the latest tax assessments, Mr Shanmugam said the Foreign Ministry had registered its concerns through two Third-Person Notes. The PUB has also contacted the Kota Tinggi District Council on the issue, he said.

In addition, Mr Shanmugam said he had also raised the matter with his Malaysian counterpart, Mr Anifah Aman, on two occasions, in April and August.

Prime Minister Lee Hsien Loong also spoke directly to Malaysian Prime Minister Najib Razak in May, he added.

Mr Shanmugam noted that Malaysia is aware that the issue of the PUB’s rights under the water agreement is “critical and sensitive” for Singapore.

“The Malaysian federal government has guaranteed in the Separation Agreement that Johor would abide by the 1962 water agreement, and the agreement does not require the payment of this land tax. We have requested the Malaysian federal government to address the issue,” he said.

The Malaysian federal government has indicated that it will work with the Johor state government to address Singapore’s concerns, Mr Shanmugam added.

Singapore notified Malaysia of concern over land tax hike for Johor River Waterworks: Shanmugam
PUB's operations in Johor are governed by the 1962 Water Agreement which does not require the water agency to pay the land tax says Foreign Affairs Minister K Shanmugam.
Monica Kotwani, Channel NewsAsia 18 Aug 15;

SINGAPORE: National water agency PUB does not need to pay the revised land assessment tax imposed on the Johor River Waterworks by the Kota Tinggi District Council, said Foreign Affairs Minister K Shanmugam in Parliament on Tuesday (Aug 18).

The PUB-owned facility in the Kota Tinggi district of Johor, draws and treats water from the Johor River. In response to a question by MP Sitoh Yih Pin, Mr Shanmugam said in late 2014, the Kota Tinggi District Council sought to double the rate of land assessment tax and the revised rate was more than double that of the next highest rate in the entire district.

However the PUB's operations in Johor are governed by what is agreed according to the 1962 Water Agreement, and the agreement does not require PUB to pay this land tax, Mr Shanmugam stated. Furthermore, the Malaysian Federal Government had guaranteed in the Separation Agreement of 1965 that Johor will abide by the 1962 Water Agreement, the minister said.

Mr Shanmugam shared that his ministry has registered its concern on the latest tax assessments with the Malaysian Ministry of Foreign Affairs. PUB has also been in touch with the Kota Tinggi District Council on the matter.

Prime Minister Lee Hsien Loong brought up this issue with his Malaysian Prime Minister Najib Razak in May this year. Mr Shanmugam added that he broached this issue with Malaysian Foreign Affairs Minister, Anifah Aman, twice - once in April this year, and most recently, on Aug 4.

He said the Malaysian government has indicated it would work with the Johor state government to address the issue.

- CNA/kk

Shanmugam: PUB not obliged to pay new land tax on Johor Water Works
AsiaOne 19 Aug 15;

SINGAPORE - The Public Utilities Board (PUB) does not need to pay the revised land assessment tax that the Kota Tinggi District Council had sought to impose on the PUB-owned Johor River Water Works, Foreign Minister K Shanmugam told Parliament today.


The district council issued a notice late last year that sought to double the rate of land assessment tax imposed on the PUB-owned facility, which draws and treats water from the Johor River. According to Mr Shanmugam, who was responding to a question by Potong Pasir MP Sitoh Yih Pin, the revised rate was more than double that of the next highest rate in the entire Kota Tinggi district.

"The water works' assessed property value was also increased. The new rate was applied to a category which was created solely for the PUB," Mr Shanmugam said.

However, he said that under the 1962 Water Agreement between Singapore and Johor, the PUB "is not obliged to pay the land assessment tax which has been sought to be imposed".

"There is some additional background on the Johor authorities imposing such taxes, in the past. For present purposes, I do not propose to go into what had happened in the past," Mr Shanmugam said.

The 1962 Water Agreement governs the PUB's operations in Johor, and is valid till 2061.

Mr Shanmugam added that Singapore has registered its concerns regarding the latest tax assessments.

"My ministry has done so with the Malaysian Ministry of Foreign Affairs through two Third Person Notes. The PUB has got in touch with the Kota Tinggi District Council on the same. I have also raised this issue directly with my Malaysian counterpart, Foreign Minister Anifah Aman, twice, in April 2015 and on August 4, 2015. Prime Minister Lee Hsien Loong also spoke directly to Prime Minister Najib Razak in May of this year," he said.

"We have requested the Malaysian Federal Government to address the issue. The Federal Government has indicated that it would work with the Johor State Government to address our concerns."


PUB not obliged to pay tax on Johor waterworks
Wong Siew Ying Straits Times AsiaOne 19 Aug 15;

National water agency PUB is not obliged to pay land assessment tax on its Johor River Waterworks, Foreign Minister K. Shanmugam told Parliament yesterday.

This is because PUB's operations in Johor are governed by the 1962 Water Agreement, which governs what PUB has to pay, he said.

He was responding to a question by Mr Sitoh Yih Pin (Potong Pasir), who had asked about the status of the tax, which the Kota Tinggi District Council had sought to impose, and whether there had been any recent developments.

PUB owns Johor River Waterworks, located in the Kota Tinggi district of Johor. It extracts and treats water from the Johor River, in accordance with the 1962 Water Agreement. This agreement is valid till 2061 and is guaranteed by the governments of Singapore and Malaysia in the 1965 Separation Agreement.

Mr Shanmugam said that late last year, the Kota Tinggi District Council issued a notice which sought to double the rate of land assessment tax imposed on Waterworks. "The revised rate was more than double that of the next highest rate in the entire Kota Tinggi district. The Waterworks' assessed property value was also increased. The new rate was applied to a category which was created solely for the PUB," he said.

He noted that under the 1962 Water Agreement, PUB is not obliged to pay the tax. The agreement gives Singapore the right to draw water from Johor River up to 250 million gallons per day, or 1.14 million cubic m a day, with Johor entitled to a daily supply of treated water in return.

"There is some additional background on the Johor authorities imposing such taxes, in the past," he said. "I do not propose to go into what had happened in the past."

With regard to the latest tax assessments, Singapore has registered its concerns with Malaysia's Ministry of Foreign Affairs through two Third Person Notes.

PUB has also got in touch with the Kota Tinggi District Council.

Mr Shanmugam told MPs he had raised the issue directly with his Malaysian counterpart Anifah Aman twice - in April and on Aug 4.

Prime Minister Lee Hsien Loong had also spoken to Malaysian Prime Minister Najib Razak on the subject when they met in May.

Mr Shanmugam said: "Malaysia is aware that the issue of PUB's rights under the Water Agreement is critical and sensitive for us.

"The Malaysian Federal Government has guaranteed in the Separation Agreement that Johor would abide by the 1962 Water Agreement. The agreement does not require a payment of this land tax."

Singapore has requested Malaysia to address the issue.

"The Federal Government has indicated that it would work with the Johor State Government to address our concerns," he said.

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