DBS ties up with IRAS in cheque-free push

Tax payouts will soon be digitised.

DBS Bank has forged a partnership with Inland Revenue Authority of Singapore (IRAS) to digitise tax payments and collections via the funds transfer service, PayNow, in a bid to help the country meet its cheque-free target by 2025, according to a press release.

IRAS first introduced PayNow as an option for businesses to receive Wage Credit Scheme (WCS) payouts in March of this year, bringing down cheque volumes by 20%.

Before PayNow was implemented, about half of WCS-eligible businesses, most of which are small and medium-sized enterprises (SMEs), still opted to receive payouts via cheques.

Also read: Over half of SMEs still in early stages of digital maturity: report

SMEs, which account for 99% of local businesses, are expected to play a huge role in the shift away from cash and cheques.

Also read: Nearly a quarter of SMEs still prefer cash and cheques: survey

“It is critical to encourage SMEs to get on board the digital payments train as they represent 99 percent of businesses locally. Partnering with 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,” says Raof Latiff, Group Head of Digital, Institutional Banking Group, DBS Bank.

For the next phase of Singapore’s Smart Nation Agenda, DBS and IRS are looking to digitise stamp duty services through the bank’s API.

Currently, most taxpayers would pay the conveyancing stamp duty via cheques, and then wait for several days for it to be cleared before a stamp duty certificate is issued.

Through DBS’ Direct Debit Authorisation (DDA) API, taxpayers have the option to set up and pay their stamp duty through a GIRO account online, and instantly receive the certificate via IRAS’ e-Stamping Portal. More digitised payments can be expected for majority of conveyancing stamp duty transactions. With a transfer limit of $200,000 per transaction, the DBS DDA solution enables IRAS to receive electronic payments.

The new DDA e-payment option for conveyancing stamp duty is set to be launched in November.