The act put into legal effect an income tax change announced in the 2010 Budget Statement.
The minimum tax relief period of five years for the Pioneer Service Incentive scheme has now been removed.
The scheme was introduced in 1984 to encourage companies to engage in high value-added activities such as consultancy and R&D.
Economic agencies will also have more flexibility in deciding who to award incentives to better meet the needs of companies.
The Development and Expansion Incentive scheme will also be enhanced. This scheme was introduced in 1996 to encourage companies to expand by investing in technology and major upgrading of equipment and operations.
In addition, the Development and Expansion Incentive scheme for International Legal Services will be reviewed after five years and can only award up to five years of tax relief, at a concessionary tax rate of 10 per cent.
Announcing the changes in Parliament on Wednesday, Trade and Industry Minister Lim Hng Kiang said: "The proposed changes to the Economic Expansion Incentives Act seek to stimulate more economic activity in Singapore. These changes also reflect the government's commitment to monitor the effectiveness of our tax regime and to keep it relevant as economic conditions change."
-CNA/ac
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