Tax Write Up: Why paying taxes is so easy in Singapore

By: Javin, Edward, Winston (Research and Training Department)

In this month’s publication, we refer to an interview done with Cheng Hui Yi, the Director of Compliance, Strategy and Insights Division, IRAS on why paying taxes is so easy in Singapore. According to a 2019 study by UNSW Sydney and KPMG, Singapore had the least complicated tax payment system in the world. Cheng Hui Yi attributes this success to the tax system designed for easy compliance by the taxpayer. Her team uses data science and behavioral insights in the design, to encourage good behavior and detect non-compliance more effectively.

The use of data analytics limits her team on understanding why taxpayers behave in a certain way and their motivations. Cheng’s team uses design thinking principles to understand users’ needs and create an ideal experience of filing tax clearances. They conducted ethnographic research with employers and employees to create a simplified pre-filled form for employers to amend details more quickly. This form was created after finding out their pain points, co-creating more than 50 ideas and testing these prototypes with users. On top of that, IRAS also redesigned the tax filing portal to make it simpler and more intuitive.

IRAS will also use AI to pre-emptively resolve questions, for example, through the use of chatbots on the IRAS website. AI can also be used to process tax returns and automatically flag out suspicious cases. This can point investigator to potential fraud cases which might not be picked up by humans.

On top of that, IRAS launched an analytics engine to store, process and analyze data from complex, technical queries frontline officers receive via email. This data will be fed to management dashboards for senior management can make decisions based on up-to-date data. This will also improve efficiency as employees no longer have to manually detail their work.

IRAS’s organizational restructuring allows her to better understand the issues on the ground and create a simple, seamless process for paying taxes.

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