Latest news with #InlandRevenueAuthorityofSingapore
Online Citizen
22-07-2025
- Business
- Online Citizen
20,000 affected by HOMES means-testing error; MOH correcting inaccurate subsidies
About 20,000 individuals in Singapore have been impacted by a processing issue in the Household Means Eligibility System (HOMES), according to a statement released by the Ministry of Health (MOH) on 21 July 2025. The glitch, which occurred in January 2025, resulted in inaccurate means-testing for individuals with business incomes and their household members. Most affected received higher-than-intended subsidies and grants, while a smaller group received less than they were entitled to. HOMES, which is managed by MOH, uses income information from the Inland Revenue Authority of Singapore (IRAS) to determine subsidy eligibility. However, changes in data processing timelines in January 2025 caused the system to miscalculate business incomes. As a result, means-testing was inaccurate for individuals and households assessed between 1 January and 27 January. MOH schemes see bulk of impact; reassessments and adjustments underway According to MOH, about 19,000 people under its schemes were affected. Another 1,000 people under schemes administered by the Early Childhood Development Agency (ECDA), Ministry of Social and Family Development (MSF), Ministry of Education (MOE), and Infocomm Media Development Authority (IMDA) were also impacted. MOH stated that HOMES provides means-testing results for various government subsidy schemes. Despite the number affected, MOH said they account for less than 3 per cent of all individuals means-tested in that period. Corrections have now begun, with reassessment of affected cases completed. MOH confirmed that from 21 July 2025, subsidy and grant tiers will be adjusted to reflect intended levels. Individuals who received higher subsidies will not have to repay any excess. Those who received less than intended will be reimbursed, with payments expected to be completed by November 2025. The affected MOH schemes include CareShield Life and MediShield Life premium subsidies and Additional Premium Support (APS). Individuals will receive the correct subsidies at their next policy renewal, while APS recipients will maintain premium coverage based on approved validity. Letters will be sent to all impacted individuals, who are not required to take any action. Under the Community Health Assist Scheme (CHAS), affected cardholders will receive letters detailing necessary steps. For subsidies related to long-term care services, adjustments will be reflected in the next billing cycle or payout date. Schemes like the Seniors' Mobility and Enabling Fund, Equipment Rental Scheme, Home Caregiving Grant and ElderFund are also impacted. Notices of adjusted subsidies or payouts will be sent to those affected. Subsidies for day surgeries, inpatient services, specialist outpatient clinics, polyclinic drugs and vaccines, and community hospital services will also be corrected. Public healthcare institutions will inform impacted individuals and adjust bills from July 2025 onwards. Where applicable, reimbursements will be issued automatically. Non-MOH schemes also affected; corrections to start from 22 July Non-MOH schemes have also been affected by the HOMES processing issue. For ECDA schemes, affected parents, preschools, and early intervention centres will be informed of adjusted subsidies from 22 July. Corrected subsidies will take effect from August 2025. Under the DigitalAccess@Home Scheme managed by IMDA, households affected will be notified from 22 July. Households that were under-subsidised will receive reimbursements automatically. Those who received higher subsidies will retain them for the remainder of their current DAH award validity. Their eligibility will be reassessed upon new applications. MOE will ensure affected students receiving higher education bursaries are informed through their Institutes of Higher Learning. No action is required from students. For children in MOE Kindergarten Care (KCare), corrected subsidies will apply from August 2025. Under MSF's Enabling Transport Subsidy, Taxi Subsidy Scheme, and Assistive Technology Fund, SG Enable will work with service providers to inform affected individuals from 22 July. Corrected subsidies will apply from August 2025. MOH emphasised that all affected individuals will be contacted progressively and no action is needed on their part. The ministry said the incident arose from a one-time misalignment in data processing timelines and added that measures will be taken to prevent similar issues in future.
Business Times
22-07-2025
- Business
- Business Times
Miscalculated grants: Overpayments amounted to S$7m for most people, a shortage of S$2m to others, says MOH
[SINGAPORE] The issue that caused a processing error in a government means-testing system which led to about 20,000 people getting the wrong subsidies and grants has been identified, said the Ministry of Health (MOH) on Jul 22. MOH, which manages the Household Means Eligibility System (Homes), said that the error had resulted in about S$7 million in over-payments for about 90 per cent of the affected individuals, and about S$2 million in shortfalls for the remainder of those affected. On Jul 21, MOH said that Homes had experienced a processing issue resulting in about 20,000 people receiving wrong subsidies and grants. The ministry said then that those who received excess subsidy or grant amounts will not have to return them, while those who received less than they were entitled to will have the difference topped up by government agencies by November. Homes uses income information from the Inland Revenue Authority of Singapore (Iras) to means-test individuals with business income, such as self-employed people – for selected subsidy schemes across the Government. What happened? For the 2025 year of assessment, Iras' tax filing notification process began later in mid-January, compared to the preceding December in previous years, said MOH. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up This was to ensure CPF contributions for the full year were captured for more accurate income tax assessments. However, the 'system logic' at the time caused Homes to omit the business income of selected individuals. This led to inaccurate means-testing for individuals with business income and members of their households between Jan 1 and Jan 27, 2025. MOH said that Homes was first alerted to the issue on Jan 13 through a member of public's query when applying for subsidies, which triggered an investigation leading to the identification of the issue. The ministry added that it is currently enhancing the design of Homes for better integration and coordination with agencies. In a similar incident in 2019, about 7,700 people who applied for and renewed their Chas cards in September and October 2018 received inaccurate subsidies after a computer system miscalculated their means-test results. THE STRAITS TIMES
Straits Times
08-07-2025
- Business
- Straits Times
Company director to be charged with tax, money laundering offences
Sign up now: Get ST's newsletters delivered to your inbox SINGAPORE - A 38-year-old Malaysian woman is slated to be charged in court on July 9 for her suspected involvement in tax and money laundering offences. In a joint statement on July 8 , the Inland Revenue Authority of Singapore (Iras) and police said that investigations into the woman began in September 2024 . She was suspected of being involved in setting up multiple Goods and Service Tax (GST) registered entities to claim fraudulent GST refunds from Iras. Investigations found that these entities had no substantial business activities and could not support the claims. The woman and the entities set up by her were suspected to have filed over $1.4 million of such fake claims between August 2017 and October 2024 . The Commercial Affairs Department (CAD) , working with Iras, then started investigating the woman as there were indications of money laundering offences committed. The investigation then revealed that the woman had allegedly transferred $213,000 between December 2019 and May 2024 to remove the money from Singapore's jurisdiction. The funds were her suspected benefits of criminal conduct, the authorities said. She is slated to face 97 charges in all, for tax and money laundering offences.
Time of India
08-06-2025
- Business
- Time of India
Singapore casts tax shadow on India bets, shuns shell companies
Mumbai: Singapore is intensifying scrutiny of companies and investment entities, a move that could ignite new tax disputes. This development particularly impacts many MNCs and international funds that use the Asian financial hub as a base to invest in and acquire companies in India. The catalyst for these potential disputes is a recent series of advance rulings by the Inland Revenue Authority of Singapore (IRAS), which define and endorse what constitutes ' economic substance '. If a Singaporean entity fails to meet the conditions emphasized by the tax administrator and thus cannot prove it has adequate 'substance,' the Indian Income Tax (I-T) department could levy higher taxes. This could involve claiming tax on certain stock sale transactions or demanding increased tax on earnings from dividends and loan interest paid by an Indian company. Dealmakers and businesses are closely monitoring this situation. "These advance rulings are the first to evaluate economic substance factors since their inclusion in 2024 as Section 10L of Singapore's Income Tax Act for taxing gains from the sale of foreign assets. These factors could be used by Indian tax authorities to determine whether a Singapore-based entity is merely a conduit, particularly when applying the Principal Purpose Test (PPT)," explained Ashish Karundia of the CA firm Ashish Karundia & Co. (A PPT is a provision that allows denial of treaty benefits). According to Girish Vanvari, founder of the tax and regulatory advisory firm Transaction Square, the implications are far-reaching due to the change in law prioritizing substance and economic reality over legal form. "For tax professionals and business leaders, this means a necessary recalibration of how Singapore is used in cross-border structuring -especially in relation to Indian operations. So, if you're using Singapore as a holding or IP base for India-related investments, it's time to revisit the structure. The days of relying purely on treaty protection without operational presence are over," said Vanvari. Many foreign investors betting on India utilize Singapore to leverage the tax treaty between the two countries. A common structure involves one of their arms in a tax-friendly jurisdiction setting up a company in Singapore (say, S1), which in turn owns another company in Singapore (say, S2). In this two-layered structure, S2 serves as a vehicle to invest in India. Typically, when exiting an Indian investment, S1 might sell the shares of S2, which holds shares in an Indian company; alternatively, S2 would directly sell its interest in the Indian company. THE PARAMETERS The IRAS underscored that economic substance would require: (a) a company to have adequate human resources with the necessary qualifications and experience; (b) have a premise in Singapore; (c) take key business decisions there; and (d) incurs expenditure. If S1 or S2 does not fulfil these criteria, they would come under the lens of the tax authorities in either Singapore or India. How? Here are the possible situations: · Say, S1 sells shares of S2 (both local entities) and if India demands tax on the 'indirect transfer' by invoking India's domestic tax regulations, companies like S1 have till now argued that under the treaty India has no right to tax gains from indirect transfers. However, in future, the I-T department could assert that the treaty holds only if S1 has substance. But if it doesn't (as per Singapore's terms), S1 cannot avail treaty benefits and must pay tax to India. Here, I-T would challenge that S1 was formed primarily to escape tax. · If S2 directly sells shares of the Indian company, there's no capital gains tax if the shares were bought before 2017 (under a grandfathering provision introduced when the treaty was amended). However, if S2 lacks substance, I-T may demand tax on the grounds that treaty relief can be denied to a shell outfit. · Suppose, S1 sells stocks it directly holds of another company in a third country. S1 can avoid tax in Singapore if it can demonstrate substance. However, if S1 fails the substance test (and is taxed by Singapore), then India would also have strong grounds to demand tax from S1 when it sells shares of S2. · Also, there's an increased risk of double taxation - with India taxing based on source and Singapore taxing based on substance.
Business Times
25-04-2025
- Business
- Business Times
Minister for Finance appoints new Iras board chairman Lai Chung Han
[SINGAPORE] Lai Chung Han, 52, incoming permanent secretary for finance, has been appointed chairman of the board of the Inland Revenue Authority of Singapore (Iras), effective May 1. He succeeds Tan Ching Yee, 60, who has served as chairman since 2016, the Ministry of Finance said in a statement on Friday (Apr 25). Lai has held several leadership roles in the Singapore Armed Forces and the Ministry of Defence. He became deputy secretary (policy) at the Ministry of Defence in 2012 and Chief of Navy in 2014. In 2017, he was appointed second permanent secretary for both education and home affairs. He was appointed as permanent secretary (education) in 2019 and, in 2024, took on the role of permanent secretary (development) at the Ministry of Finance. In 2022, he received the Public Administration Medal (Gold) from the president. Under Tan's leadership, Iras participated in major international platforms and represented Singapore as a bureau member on the Organisation for Economic Cooperation and Development Forum on Tax Administration. It grew beyond its traditional role to become the centre of excellence for national grant disbursement, rolling out schemes such as the Rental Support Scheme, Jobs Support Scheme and Wage Credit Scheme, to support businesses and workers. The company also upgraded its digital systems and used artificial intelligence to improve services for taxpayers. 'The Ministry of Finance and the Inland Revenue Authority of Singapore welcome Mr Lai to the Board and would like to express our deep appreciation to outgoing chairman, Mrs Tan Ching Yee, for her significant contributions to the Iras board,' the statement noted.
