Data on Applications and Approvals for Tax Incentives under Section 13U of Income Tax Act 1947 for Last 10 Years

Ms He Ting Ru asked the Prime Minister and Minister for Finance for each of the last 10 years (a) how many entities have applied for tax incentives under section 13U of the Income Tax Act 1947, formerly known as section 13X; and (b) how many entities have been granted the incentive.

My response will also address related questions by Ms Sylvia Lim, Mr Louis Chua and Ms He Ting Ru from yesterday and today, as well as a written question by Mr Abdul Muhaimin Abdul Malik scheduled for tomorrow's Sitting.

Singapore upholds high regulatory standards in our financial system aligned with international standards. It is one reason why many investors view Singapore as a trusted financial hub. Like other global financial centres, having high standards does not mean there will be zero cases involving entities and individuals who break the rules or who fail to comply with our regulatory requirements. What is key is that where wrongdoing is identified, the authorities will investigate thoroughly and take firm enforcement action in accordance with the law.

The money laundering investigations by the Police against Chen Zhi and related associates are ongoing. Enforcement operations were conducted on 30 October 2025. Arising from the enforcement operations, the Police have issued prohibition of disposal orders and seized a range of assets, including properties, cars, bank accounts and securities accounts. Prior to the indictment of Chen Zhi by the US, our Police had been conducting probes into Chen Zhi and his associates. Thus far, the Monetary Authority of Singapore (MAS) has identified two Single Family Offices (SFO) funds granted tax incentives that are linked to the sanctioned individuals. MAS has ceased the tax incentives. As investigations are ongoing, I seek Members' understanding that I am not able to comment further on the details at this stage.

Based on available data over the past three years, about 3% out of 1,300 applications1 were rejected. Besides the rejected applications, some potential applicants also withdrew their interest to apply before submitting a formal application when questions were posed and requirements were clarified at the pre-application stage.

As part of the tax incentive application process, individuals and entities are screened against databases to check that there are no reports on their involvement in illegal activities, such as money laundering and terrorism financing. The SFO fund is also required to open and maintain an account with a MAS-licensed bank and be subject to the bank's customer due diligence and ongoing monitoring checks, including detecting any unusual or suspicious transactions.

MAS regularly reviews and refines its regulatory regime. It consulted on proposed changes to the SFO regulatory regime in July 2023. In addition to now requiring all SFOs based in Singapore, whether they are receiving tax incentives or not, to maintain bank accounts, SFOs will need to notify MAS upon the commencement of their operations and submit annual returns to MAS. The returns supplement MAS' ongoing surveillance efforts to maintain the integrity of our financial system.

MAS and the financial industry will continue to review our surveillance and detection capabilities. But we need to adopt a sensible and calibrated approach and should refrain from a knee-jerk overreaction when cases happen from time to time. Similar to all major international financial centres, it is not possible to have zero incidents, given the complex nature of the financial services industry and the high volume of daily transactions. In addition, combatting financial crime requires a global effort, as illicit fund flows are often cross-border in nature. In the Prince Holdings case, the US seized US$15 billion in Bitcoins and the UK froze 19 properties. All major financial centres have to remain vigilant and work together to combat financial crime.

SFOs linked to individuals convicted of money laundering offences represent a very small proportion of the overall sector, at less than 1%2. We have to remain open to bona fide family offices and genuine investors, to continue growing our financial services industry and creating good jobs for our people. As at end 2024, the wealth management and private banking functions in banks employed more than 13,000 locals3. High net worth clients also use other service providers, such as legal and tax advisors, fund administrators and accounting firms.

Compared to other financial centres, many industry stakeholders already consider Singapore to have more stringent due diligence standards for high net worth clients. If we were to tighten further to the point where the processes become overly cumbersome, it will affect our competitiveness, deter legitimate investors and put many local jobs at risk. This is not the outcome we want for Singapore.

There is a Chinese saying that when we open the windows, some flies may also enter. The solution is not to shut our windows and block out sunlight and fresh air. What matters is that we act swiftly to deal with the flies that enter, while also letting in sunlight and fresh air. This is the approach we take in Singapore – risk-proportionate, not zero-risk.

MAS will continue to take a risk-proportionate approach to maintain our status as a trusted financial centre. MAS expects our financial institutions to do the same, so that we collectively maintain high standards while keeping our system efficient and competitive. Singapore will also continue to work closely with our international counterparts to deter and enforce against bad actors who operate across different jurisdictions.