The government will allow annual contribution limits for Individual Savings Accounts (ISA) to be carried over and will remove limits on contract terms. It has effectively restored the previous system a month after proposing tougher rules in last month’s tax overhaul plan. A bill dubbed the anti stock price suppression bill will be revisited to draw up improvements through further discussion during the regular parliamentary session.

The Ministry of Economy and Finance said on Monday it finalised a revision bill to tax laws including the Income Tax Act, incorporating improvements to the ISA scheme, at a cabinet meeting. The government plans to submit the bill to the National Assembly by Sept. 3.

Under the revised plan, a general ISA will continue to allow account holders to carry over unused amounts of the annual contribution limit to the next year, as under the current system.

It will also set no upper limit on the contract term. After meeting the minimum subscription period of 3 years, account holders will be able to keep the account without a separate maximum contract term.

In the tax overhaul plan announced on Aug. 3, the government had decided to set the initial contract term for a general ISA at 3 years and cap the total contract term at 5 years. It also proposed not allowing carryover of unused portions of the annual contribution limit.

The government shifted to keeping the existing system after criticism that it could disadvantage the self-employed and freelancers with irregular income, and limit long-term investment and compound interest effects.

The same direction applies to a productive finance ISA the government is seeking to introduce. The minimum subscription period will be 3 years, but there will be no limit on the maximum contract term and carryover of unused annual contribution limits will be allowed.

The original government plan included capping the maximum contract term for the productive finance ISA at 10 years and abolishing carryover of annual contribution limits.

It will also allow overlapping subscriptions to a youth ISA and a youth future savings plan. The government had decided in the earlier tax overhaul plan to limit overlapping subscriptions to the two products, but it withdrew that policy in the revised plan.

The ministry explained the background to the ISA revisions by saying it would support the public in building assets.

The revised plan, however, did not reach a conclusion on the tax overhaul proposal related to the so-called anti stock price suppression bill.

The government said it plans to draw up reasonable improvement measures during the regular parliamentary session’s review process after sufficient collection of opinions, including discussions between the ruling party and the government.

As a result, while the ISA system shifted toward keeping most of the existing benefits at the government proposal stage by reflecting investor opposition, details of the anti stock price suppression bill are expected to be decided during the National Assembly’s review of the tax law revision bill.