Based on the reports on Monday (17 Feb), Singapore announced that 20 per cent less paper checks have been used by business taxpayers as they embrace digital payments with the aim of being check-free by 2025.
The country seeks to realize its Smart Nation vision by steering away from paper checks and harnessing tech-enabled solutions.
DSB Bank and the Inland Revenue Authority of Singapore (IRAS) are collaborating firms to utilise tax payment digitalization and collections via PayNow.
PayNow, the peer-to-peer funds transfer service, was launched by IRAS in March 2019 to allow businesses to receive Wage Credit Scheme (WCS) payouts, which led to a fall in check volume by 20 per cent. Around 50 per cent of WCS-eligible businesses, most of which are small businesses (SMBs), opted to receive payments by check before the introduction of PayNow.
The country will proceed with digitalizing stamp duty services as its next tax payment digitalization.
The director of the IRAS revenue and payment management branch, Ang Sor Tjing remarked that ”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.”
The WCS payouts were extended through 2020 as incorporated in Budget 2018, with co-funding by the government maintained at 20 per cent.
According to the group head of digital and institutional banking group for DBS Bank, Abdul Raof Latiff, digital transactions have been readily accepted by the people of Singapore and “it is critical to encourage [SMBs] to get on board the digital payments train, as they represent 99 per cent of businesses locally.”
Collaborating with IRAS “is one of the key ways to encourage this shift,” Mr Latiff remarked, with IRAS using “channels across [its] suite of services” at the forefront with electronic fund transfers.
Both DBS and IRAS are also working together to leverage DBS’ application programming interfaces (APIs) in order to digitalize IRAS stamp duty services. Conveyancing stamp duty pertains to taxes related to the buying of a property. Checks are used by most people for stamp duty services, and stamp duty certificate can be released after the check is cleared.
Taxpayer can open a GIRO account online with the DBS Direct Debit Authorisation (DDA) API to pay for stamp duty. Stamp certificate can be obtained instantly by users through the IRAS eStamping portal.
A joint venture was formed in Singapore last week between payments firm Assembly Payments and British bank Standard Chartered with the aim of bringing payment solutions its US$29 trillion global eCommerce market.