Deferment of Income Tax Payment for Retrenched Citizens

Mr Zainal Sapari asked the Minister for Finance whether IRAS will allow Singaporeans who are retrenched due to the economic downturn this year to defer their income tax payment till they are able to find employment.

Mdm Speaker, under the existing Inland Revenue Authority of Singapore (IRAS) General Interbank Recurring Order (GIRO) scheme, taxpayers can pay their income tax by up to 12 monthly interest-free instalments. A taxpayer who faces financial hardship may apply to IRAS for longer instalment plans.

I have one supplementary question. In serious cases of financial difficulty, will IRAS consider reducing or waiving the person's tax liability?

Madam, I think that if a person has a serious financial hardship, what the person should do is approach IRAS and speak to them. As a general rule, IRAS does not waive income tax liabilities. You need to have some financial prudence and discipline but, at the same time, you also need to balance that where individuals generally want to pay but for some reason, their circumstances really, really do not allow them to. So, the best approach is to speak to IRAS.

Currently, they do have interest-free instalment plans. They would try, where possible, to exercise flexibility. But at the end of the day, we have to do two things: maintain the fiscal prudence and discipline in tax recovery for the state and, where possible, balance that with compassion on the part of individuals.