Fail to pay tax despite reminder? Bank can step in

SINGAPORE - Singapore's taxman and DBS Bank yesterday gave an explanation for a retiree's claim that her bank account was hacked into when she forgot to pay her property tax.

The Inland Revenue Authority of Singapore (Iras) said that when a person fails to pay property tax even after a reminder has been sent, it will appoint a bank to use the person's money which it holds to pay on his behalf. DBS added that it will inform the person in writing before it makes the deduction.

Both organisations were responding to queries from The Straits Times after retiree Irene Yap, 76, claimed at a Central Provident Fund (CPF) dialogue on June 14 that her DBS account was hacked into after she forgot to pay her property tax.

The former teacher said the bank had "scoured" her account for money to give to the Iras, and questioned whether it was ethical.

But under Section 38 of the Property Tax Act, banks can pay overdue taxes from money held for or on behalf of the taxpayer, DBS said yesterday.

The Iras said when a taxpayer does not pay taxes by the due date, it will send the person a "notice to pay", with a 5 per cent penalty added.

"The penalty will be waived if (the) taxpayer has genuine reasons for failure to pay," it said. "A taxpayer who is stretched in his or her finances should contact Iras to work out an instalment plan."

The Iras website shows payment must be made within 14 days of the reminder.

Yesterday, the Iras said it will appoint a bank to pay taxes owed to the Government by a person only if he does not respond to the "notice to pay'' reminder. The bank is released as agent only after the tax and penalty are fully paid, said its website.

At the same dialogue, which was conducted by Member of Parliament Hri Kumar Nair, Ms Yap also claimed she was not able to withdraw money from her CPF Retirement Account (RA).

Last Friday, the CPF Board and Senior Minister of State for Manpower and Health Amy Khor cleared the air about her situation. The Board said it will send CPF members who reach their drawdown age a letter to inform them that they can apply to receive monthly payouts from their RA.

Ms Yap was notified four months before her drawdown age in 1998, but she did not respond. In 2012, the CPF Board reminded her again that she could start receiving her monthly payouts. Again, they did not receive any instructions from Ms Yap, said Dr Khor.

The CPF Board said it is in contact with Ms Yap to help her withdraw her RA savings if she wants to. Ms Yap could not be reached for comment yesterday.

asyiqins@sph.com.sg

This article was first published on June 26, 2014.
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