Shanmugam: PUB not obliged to pay new land tax on Johor Water Works

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."