IRAS and DBS target a cheque-free Singapore by 2025
In line with Singapore’s Smart Nation agenda, the Inland Revenue Authority of Singapore (IRAS) is collaborating with DBS Bank to digitise tax payouts and collections via PayNow. The move is designed to encourage more businesses to go cheque-free.
IRAS first introduced PayNow as an option for businesses to receive Wage Credit Scheme (WCS) payouts in March, resulting in a 20% reduction in cheque volumes to-date. Before the implementation of PayNow, about half of WCS-eligible businesses chose to receive their payouts via cheques.
For the next phase, both parties are working together to leverage DBS’ application programming interfaces (APIs) to digitise IRAS’ stamp duty services. Currently, most taxpayers tend to pay for conveyancing stamp duty via cheques and have to wait several days for the cheque to be cleared before a stamp duty certificate is issued. However, with DBS’ Direct Debit Authorisation (DDA) API, taxpayers can set up a GIRO account online, and make payment for their stamp duty and receive a stamp certificate through IRAS’ e-Stamping Portal instantly. In addition, with a transfer limit of SG$200,000 per transaction, the DBS DDA solution also enables IRAS to digitalise payments for the majority of conveyancing stamp duty transactions. This DDA e-payment option for conveyancing stamp duty will be launched in November.
Since PayNow was launched to corporates in August last year, DBS has seen a steady increase in SMEs adopting the digital payment collections solution, with the bank holding close to 40% of the market share by registrations to date. From a transactions perspective, DBS’ corporate clients contribute to more than half of PayNow Corporate receipts in Singapore, with volumes from the bank’s SME customers growing threefold to date. This was mainly driven by the take-up of the bank’s PayNow-integrated QR payment solution, DBS MAX, which led to a doubling in digital payment and collection transactions by SMEs since the solution was launched in November 2018.
