CONTENTS
HOME
OUR WORK
Managing Risks,
Emerging Stronger
TUMULTUOUS
YEAR FOR THE
GLOBAL ECONOMY
MONETARY POLICY
AN UNPRECEDENTED CRISIS
INTEGRATED
APPROACH TO
FOSTER SAFETY AND
SOUNDNESS OF
FINANCIAL
INSTITUTIONS AND
FINANCIAL SYSTEM
BUILDING ON OUR
FUNDAMENTALS,
PREPARING FOR
THE UPTURN
ENHANCING
OPERATIONAL
CAPABILITIES AND
RESILIENCE
CURRENCY AND
PAYMENT SYSTEM

Tax Concessions for Loan Impairment Provisions Extended

Banks are currently allowed to claim tax deductions for loan impairment provisions made under MAS Notice 612 on Credit Files, Grading and Provisioning, subject to caps as stipulated under Section 14I of the Income Tax Act. This concession was introduced in 2005 and is valid for five Years of Assessment. Similar tax concessions were granted for collective loan impairment provisions made by finance companies and merchant banks.

In order to encourage banks to continue making adequate loan impairment provisions and bolster their financial strength to underpin continued lending in the downturn, MAS worked with the Ministry of Finance to extend this tax concession, with the same terms and conditions, for a further three years. The extension of the tax concession will likewise apply to finance companies and merchant banks.