INLAND REVENUE AUTHORITY OF SINGAPORE (Tax refunds)

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INLAND REVENUE AUTHORITY OF SINGAPORE:

(Tax refunds): 13.

Ms Indranee Rajah asked the Deputy Prime Minister and Minister for Finance why were there excess taxes totaling $28.05 million, as at February 2003, which had not been refunded by the Inland Revenue Authority of Singapore (IRAS) to the relevant tax payers for more than three years and whether IRAS will be taking steps to expedite tax refunds in the future

The Second Minister for Finance (Mr Lim Hng Kiang): Mr Deputy Speaker, the $28.05 million in un-refunded taxes as at February 2003 belonged to 63,910 persons. $22.98 million or 82% belonged to 49,444 foreigners (77%), while $5.07 million (18%) belonged to 14,466 Singaporeans (23%). So, as we can see, an overwhelming majority of the un-refunded cases involve foreigners.

IRAS has not been able to make the tax refunds as most of these foreigners did not leave their foreign addresses with

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IRAS, though IRAS nevertheless puts in its best effort to track them down. For instance, in 2000, a taxpayer in Korea wrote to the Korean Herald , their newspaper, praising IRAS' exemplary efforts to track him down in Korea so as to provide him with his tax refund.

Showing just how difficult it is to make these refunds to foreigners, having been alerted about these arrears, IRAS made an extra effort and even by end-June 2004, $22.11 million belonging to 48,180 foreigners still remains un-refunded. IRAS has been able to track only 2.6% of the foreigners and returned 3.8% of the total amount belonging to foreigners.

However, IRAS has had much more success with the Singaporeans. By the end of June 2004, IRAS has settled 76.5% of the cases involving 75.7% of the total unrefunded taxes belonging to Singaporeans, with the sums being sent to the Official Assignee in the case of undischarged bankrupts. The 3,399 cases still unrefunded, involve a total sum of $1.23 million, and these are Singaporeans who are not contactable. Many of these may be taxpayers who have emigrated without leaving their foreign addresses. A number are Singaporeans who have passed away. IRAS has written to the families of the deceased but has not received replies.

So, all in all, of the $28.05 million of unrefunded taxes as at February 2003, $23.34 million remained unrefunded in June 2004, not because IRAS has not been trying, but simply because the taxpayers or their beneficiaries are not contactable.

In many tax jurisdictions, if the taxpayer does not make his claim, the tax authority will simply hold on to the money. Here, IRAS will continue to do its

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best to contact all who have unrefunded taxes, and to make the refunds promptly.

Ms Braema Mathiaparanam: Could I just ask the Minister on this $23.3 million, how long is the money sitting in the system and is there a process by which, if it is after a certain period of time, the money could be channelled into charity?

Mr Lim Hng Kiang: I guess that was the question coming. As Members can see, we try our best to refund the money. So some of these cases would have been very long outstanding. And there are no laws which allow us to pass on the money to charity.