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DBS partners taxman to digitise S$4.6b stamp duty collection in Singapore
THE Inland Revenue Authority of Singapore (Iras) collected S$4.6 billion from stamp duties - a tax levied on property transactions - in fiscal 2019 for the year ended March 31, 2019, but with most taxpayers paying for their stamp duties using cheques.
DBS on Tuesday said it will work with the taxman to smoothen the payments process by taking the process digital. From November, taxpayers will be able to set a GIRO account online to make payments for their stamp duty. With that, they will be able to receive a stamp certificate through Iras' e-Stamping Portal instantly.
The connection will be done through the use of an application programming interface that will permit transfers of as much as S$200,000 per transaction.
Stamp duty made up 9 per cent of the total tax revenue collected by Iras in its fiscal 2019.
Iras had first introduced PayNow as an option for businesses to receive Wage Credit Scheme (WCS) payouts in March, resulting in a 20 per cent reduction in cheque volumes since then, DBS said. Before the implementation of PayNow, about half of WCS-eligible businesses, many of which are small and medium enterprises (SMEs), chose to receive their payouts via cheques.
In a press statement issued by DBS, Ang Sor Tjing, director of Iras' Revenue and Payment Management Branch, said the recent moves are meant to encourage businesses - many of which are SMEs - to go cheque-less and make the transition to digital payments.
"As part of Iras' digitalisation drive, we are also working with DBS to expand the use of PayNow to more services for the convenience of businesses and individuals," she said.
"Besides stamp duty payments, with cashless payments gaining momentum in Singapore, taxpayers are encouraged to use cashless or electronic payment modes such as GIRO and online banking to fulfil their other tax obligations," Ms Ang added.
DBS's corporate clients currently contribute to more than half of PayNow Corporate receipts in Singapore, with volumes from the bank's SME customers growing threefold since PayNow was launched to corporates in August a year ago. DBS said the bank holds close to 40 per cent of the market share by PayNow Corporate registrations to date.
In the press statement, Raof Latiff, DBS's group head of digital, Institutional Banking Group, said: "To bring Singapore's digital agenda to fruition, it is critical to encourage SMEs to get on board the digital payments train as they represent 99 per cent of businesses locally. Partnering statutory boards like Iras is one of the key ways to encourage this shift, with them leading the way by digitalising payments and collections channels across their suite of services."