Tax Credit

Date: January 28, 2003

SIAS recognizes that the payment of dividends to shareholders depends on several factors, including the cash position of the company and the projected need for funds for business expansion.

However, in view of the phasing out of S.44 tax credit over the next five years, SIAS urges public listed companies which have S.44 tax credit to take this factor into consideration and where feasible pass down this potential benefit to shareholders in the form of increased dividends. Companies should disclose the amount of accumulated S.44 tax credit in their annual report and their plan for the utilization of this tax credit.

The bulk of retail investors will benefit from these tax credits as many are in the lower income tax brackets. Directors should take care to ensure that these tax credits do not expire at the expense of the minorities.

Mr David Gerald J.
President & CEO
Securities Investors Association (Singapore)