Decline in IRAS' Operating Surplus and Productivity Targets amid Rising Operating Expenditure

Parliamentary Question by Ms Diana Pang Li Yen:

To ask the Prime Minister and Minister for Finance given that IRAS' operating surplus fell from approximately $115.3 million in FY2024/25 to $8.0 million in FY2025/26 while operating expenditure increased substantially (a) whether this reflects temporary transformation costs or a structural increase in IRAS' cost base; and (b) what productivity or cost-efficiency targets have been set by IRAS for the next three years.

Parliamentary Reply by Second Minister for Finance, Mr Jeffrey Siow:

IRAS’ operating surplus fell mainly due to higher expenditure arising from the ongoing upgrade of its tax administration IT system. The increase is largely transitional, as IRAS is operating both existing and new systems concurrently during the transition period. These costs will taper off once the legacy system is decommissioned.

IRAS maintains its Cost per Dollar of Tax Collected below 1 cent as an indicator of operational efficiency. This stood at 0.63 cents in FY2025. IRAS will continue to use technology, artificial intelligence, and new capabilities to raise productivity and efficiency, while ensuring service quality.