20 Jun 2008
From 2009 onwards, all employers with 100 or more employees will be required to participate in the Auto-Inclusion Scheme (AIS).
The AIS is a scheme where employers send in their employees’ income information to the Inland Revenue Authority of Singapore (IRAS) electronically during the tax-filing period. The information is then pre-filled on the employees’ electronic tax returns, and included in their income tax assessments.
An employer is required under Section 68(2) of the Income Tax Act to provide his employee with a statement of his salaries for the past year (commonly known as the IR8A Form – The Returns of Employee’s Remuneration) so that his employee can file his tax return by 15 April each year.
With the AIS, employers no longer need to prepare paper copies of the statements for each of their employees. Employees whose employers are in the AIS would also find it easy and convenient to file their tax returns as the employment income information is already provided to IRAS directly by their employers. They only need to log in to myTax Portal to check the information on their electronic tax returns when they e-File. They can also potentially benefit from No-Filing Service (NFS) in subsequent years if there are no changes to their tax relief items.
Currently about 6,300 employers are already participating in the AIS, with more than 740,000 taxpayers’ income information being sent electronically to IRAS each year during the filing period. These employers have joined the AIS on a voluntary basis. Of the 6,300 employers, about 1,100 of them have 100 or more employees. IRAS targets to include another 700 employers with 100 or more employees in the scheme come next year.
With another 700 more employers participating in the AIS, another 110,000 taxpayers will no longer need to provide their employment income details when filing their income tax, bringing the total number of taxpayers benefiting from the scheme to about 850,000.
The AIS will be made compulsory for employers in phases over the next three years. For a start, only those with 100 or more employees will be required to join the scheme from next year. This is because they are generally more IT-ready and have electronic payroll systems in place.
For smaller employers with fewer than 100 employees, IRAS is aware that not all of them have IT or electronic payroll systems in place. They will require more time to comply with the compulsory AIS and hence we will include them from 2010 onwards. In the meantime, we will engage them to better understand their concerns and needs and provide educational and technical assistance, where necessary, to get them ready. IRAS will also be working with bodies like ASME, SBF, SHRI and SNEF to ensure the smooth implementation of the compulsory AIS.
Employers can either transmit their employees’ income information to IRAS via the e-Submission of Employment Income Application, a free web-based program provided by IRAS since January 2007, or the Provident And Tax Line (PATLine).
IRAS will be writing to employers who are required to participate in the compulsory AIS to inform them about the scheme. They will need to electronically submit the employment income of their employees for the year 2008 between January and 1 March 2009. Employers with 100 or more employees who do not receive the notice from IRAS by July 2008 should contact IRAS Helpline at 1800 356 8015 or send email to ais@iras.gov.sg.
Employers can be charged under Section 94 of the Income Tax Act for non-compliance. The penalty is a fine not exceeding S$1,000 and in default of payment to imprisonment for a term not exceeding 6 months. However, we would like to assure all employers that if they have genuine difficulties in complying, we will not penalise them and will help them resolve their issues.
New participating employers who require assistance can:
a) Refer to step-by-step guides available on IRAS’ website at http://www.iras.gov.sg > Quick Links (e-Services) > Other e-Services > e-Submission of Employment Income
b) Sign up for free seminars at IRAS. An invitation letter will be sent to employers or they can refer to IRAS’ website for details;
c) Make an appointment to attend coaching sessions at IRAS’ Surf Centre, located at Revenue House;
d) Call the IRAS Helpline at 1800 356 8015 (select option 3); or
e) Email their enquiries to ais@iras.gov.sg.
Issued by Inland Revenue Authority of Singapore