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Second Reading Opening Speech by Second Minister for Finance, Mr Chee Hong Tat, on the Inland Revenue Authority of Singapore (Amendment) Bill, at The Parliament, 16 February 2024

16 Feb 2024
1     Mr. Speaker, I beg to move, “that the Bill be now read a second time.”


2     Sir, the Inland Revenue Authority of Singapore was incorporated by the IRAS Act in 1992, which set out IRAS’s functions in tax administration. 

3     Over the last decade, IRAS has also taken on the complementary function of disbursing broad-based grants to businesses. These refer to grants where Government administrative data is used to determine firm eligibility and grant quantum, and payouts are automatically disbursed without a need for businesses to apply. 

4     Examples of such broad-based grants include the Progressive Wage Credit Scheme and the Uplifting Employment Credit, which encourage firms to adopt progressive hiring practices. 

5     During the COVID-19 pandemic, IRAS also played a pivotal role disbursing the Jobs Support Scheme, the Rental Support Scheme and the Small Business Recovery Grant to support our businesses to tide over the challenging economic conditions. 

6     Sir, to give Members a sense of the magnitude of payouts that IRAS disburses annually – last year, it disbursed $4.6 billion of grants to more than 120,000 businesses. At the height of COVID in 2020, IRAS disbursed 6 times that amount, to more than 150,000 businesses. 

7     Given the continued importance of this function, both in steady state and in crisis, the proposed amendments to the IRAS Act aim to formalise IRAS’ role as a grant disbursement agency, alongside its role as tax administrator. It will grant IRAS new powers to investigate fraud and abuse, and also to seek recovery of monies when there are erroneous disbursements. 

8     Let me take Members through the key amendments.

Amendments to Inland Revenue Authority of Singapore Act 

9     The first key amendment grants IRAS the function of administering scheduled public schemes for and on behalf of the Government or any other statutory body. 

10     In the past, the power to disburse grants was granted to IRAS through subsidiary legislation. As disbursing grants becomes a larger part of IRAS’ mandate, it is appropriate to include it as a key function in the IRAS Act. 

11     The second key amendment enables IRAS to effectively audit and investigate cases of fraud and abuse of enterprise grants. 

12     With the increase in the number of grants disbursed, there has been a corresponding rise in the number of fraud cases. For instance, in 2022, the director and operations manager of a spa were convicted in court for attempting to cheat IRAS into disbursing a Jobs Support Scheme payout of approximately $50,000 during the pandemic in 2020. The duo had submitted false declarations and fake employment contracts of 28 individuals who did not perform work or receive salaries. Thanks to the vigilance of our IRAS colleagues, no disbursement was made as inconsistencies were detected in the documents provided.

13     As IRAS continues to enhance its capabilities to detect fraud, it currently lacks the legislative levers to investigate fraud and abuse pertaining to grants. Such cases have to be referred to the Police for investigation.

14     To enable IRAS to be more effective in this role, we propose to amend the IRAS Act to provide IRAS with enforcement powers to investigate serious grant offences, including the power to access premises, conduct inspections, seize documents, and make arrests. These enforcement powers are similar to existing powers under the Income Tax and GST Acts, where IRAS investigators are empowered to investigate tax offences.

15     We will also make it an offence to interfere with or refuse to comply with IRAS’ investigation of serious grant offences. Those who are found guilty of the offence will be liable to a fine not exceeding $10,000 and/or imprisonment for a term not exceeding 12 months.

16     The amendments also set out the specific offences and punishments for obtaining or assisting another person to obtain a grant under the Scheduled public schemes. 

17     Depending on the severity of the offence, those convicted will be liable to a penalty equal to 1, 2 or 3 times the amount of payout overpaid or would have been overpaid; and a monetary fine and/or imprisonment. These penalties are aligned with the penalties for similar offences under the Income Tax and GST Acts. 

18     The third key amendment provides IRAS with the powers to recover overpaid grants as a debt due to the Government, and to impose interest on outstanding amounts beyond the prescribed payment period. These debts owed to Government could arise from either fraud or abuse, or further data updates or data errors.

19     So, as I shared earlier, most of the grants are disbursed automatically by IRAS, where government administrative data is used to determine firm eligibility and grant quantum. This allows disbursements to be made promptly, and businesses, especially our SMEs, do not need to expend additional effort to make applications. 

20     However, there could be errors discovered or further updates to the data after the monies have been disbursed, for instance when a firm makes a genuine retrospective adjustment to its CPF contributions. As the eligibility assessment and grant quantum were computed based on outdated data, certain recipients might already have received more grants than they are entitled to.

21     When this happens, we propose that IRAS should have the power to recover the excess amounts from these recipients. As these are public funds, even if the error was no fault of the recipients, they have a responsibility to return the overpaid amounts. This can be done without penalties for recipients who are cooperative. The proposed legal powers, including the imposition of interest for late repayment, signal the serious nature of the issue, and encourage firms to return any overpaid monies in a timely manner.

22     The remaining amendments to the Bill are operational and administrative in nature. They are to (i) protect the identity of informers; (ii) allow IRAS to compound offences; (iii) allow service of documents by personal delivery or ordinary post; and (iv) allow a person to provide the documents and information required by IRAS for the investigation of an arrestable offence via electronic service.

23      Together, these powers allow IRAS to more effectively disburse the various grant schemes, and mitigate the risk of fraud and abuse. 


24     Sir, IRAS has and will continue to play an important role in the disbursement of grants and support to our enterprises. The proposed legislative amendments are necessary to empower IRAS to do so effectively.

25     Mr Speaker, I beg to move.

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