With a goal of being check-free by 2025, Singapore said business taxpayers are using 20 percent fewer paper checks and embracing digital payments, according to reports on Monday (Feb. 17). The move away from paper checks aligns with Singapore’s Smart Nation agenda, a government initiative to harness tech-enabled solutions.
IRAS launched PayNow to enable businesses to receive Wage Credit Scheme (WCS) payouts in March, which resulted in a drop in check volume by 20 percent. Prior to the use of PayNow, about 50 percent of WCS-eligible businesses — many being small businesses (SMBs) — chose to receive payments by check.
Singapore’s next tax payment digitalization step will target digitalizing stamp duty services.
“Implementing PayNow for the disbursement of the scheme’s payouts helps encourage businesses, many of which comprise [SMBs], to go checkless and transition [toward] digital payments. As part of IRAS’ digitalization drive, we are also working with DBS to expand the use of PayNow to more services for the convenience of businesses and individuals,” said Ang Sor Tjing, director of the IRAS revenue and payment management branch.
In the 2018 budget, WCS payouts were extended through 2020, and government co-funding was maintained at 20 percent.
Abdul Raof Latiff, group head of digital and institutional banking group for DBS Bank, said that the people of Singapore have readily accepted digital transactions, and “it is critical to encourage [SMBs] to get on board the digital payments train, as they represent 99 percent of businesses locally.”
Latiff added that working in partnership with IRAS “is one of the key ways to encourage this shift,” with it being out in the forefront with electronic fund transfers, using “channels across [its] suite of services.”
The two are also collaborating to leverage DBS’ application programming interfaces (APIs) to digitalize the IRAS stamp duty services. Conveyancing stamp duty refers to taxes relating to the purchase of a property. Most people use checks for stamp duty services, and must wait for a check to clear before a stamp duty certificate can be released.
With the DBS Direct Debit Authorisation (DDA) API, taxpayers can open a GIRO account online, which can be used to make stamp duty payments. Using the IRAS eStamping portal, users can get a stamp certificate instantly.
Last week, British bank Standard Chartered and payments firm Assembly Payments established a joint venture in Singapore to bring payment solutions to its $29 trillion global eCommerce market.