Highlights on Talk...

SINGAPORE (Dow Jones)--

Singapore will not lower its personal or corporatetaxes this year, but the government may reduce the levies in the future toremain competitive."

After we amend the constitution to revise the framework for drawinginvestment income from our reserves, we will reassess our options oncorporate and personal income tax and lower rates further should it becomenecessary," Minister for Finance Tharman Shanmugaratnam told parliamentFriday. He didn''t say when the constitution may be amended.

Tharman said the government would offer a 20% income tax rebate of up toS$2000 per resident in 2008, a move to help ease the burden of a recentsurge in consumer prices on the island.

The government expects the rebates to cost the government about S$380million.

Singapore is expected to post a budget surplus of S$6.4 billion for theyear ended Mar. 31 following an initial projection for a S$0.7 billiondeficit.

Among new incentives to draw foreign firms to Singapore, Tharman said thegovernment will offer a 5% tax break for businesses engaging in Islamicfinance.

"To encourage more Sharia-compliant activities to be done out of Singapore,I will introduce a 5% concessionary tax rate for income derived fromqualifying Sharia-compliant activities, specifically in the areas oflending, fund management, insurance, and reinsurance," he said.