Another "honest mistake" by the govt

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$7.5m in GST wrongly charged by govt agencies over five years to be refunded to public from March 2024​

The agencies have taken immediate steps to stop charging GST on the fees as of Feb 14, and will start contacting affected taxpayers from March. PHOTO: ST FILE

Tham Yuen-C
Senior Political Correspondent

FEB 14, 2024


SINGAPORE - About $1.5 million in GST has been wrongly collected by 18 government agencies each year for regulatory services, and will be refunded to those affected, the Government said on Feb 14.
The fees for the 18 regulatory services were wrongly deemed as processing fees by six agencies - the Council for Estate Agencies, Housing and Development Board, Land Transport Authority, Singapore Food Agency, Urban Redevelopment Authority, and Office of the Public Guardian, Ministry of Social and Family Development.
As a result of the misclassification, GST was collected when people and businesses paid fees for the 18 services, such as to renew their real estate agent licenses, apply to operate a food processing company, register a lasting power of attorney, or rent out an HDB flat or bedroom, among other things.
The agencies have taken immediate steps to stop charging GST on the fees as of Feb 14, and will start contacting affected taxpayers from March, the MOF said in a statement.
“MOF and the six agencies apologise for the erroneous charging of GST. All agencies have taken immediate steps to cease the charging of GST on the affected fees from today,” said Ministry of Finance Second Permanent Secretary Lai Wei Lin. “The Government will refund affected taxpayers the GST charged for the fees, and we will make the refund process as seamless as possible.”
According to Singapore’s GST system, GST should not be charged on fees for regulatory services, which are the kind of services that require a government agency to determine if a business or person is eligible to engage in various activities, based on official rules or laws.

In this case, the fees for the services were wrongly deemed by the agencies to be processing fees.

For instance, an agency had charged GST on the application fee for a license, but had not charged GST on the license itself, even though it should not have charged GST on either the application fee or the license.
GST is charged on government services such as the use of public sports facilities or the rental fees for hawker stalls.
The 18 fees in question represent less than 0.5 per cent of the total number of government fees, said MOF. Of these, HDB fees accounted for over 70 per cent of the 200,000 affected transactions each year, with the majority of the fees between $1 and $2.
To prevent such errors in future, the MOF will be making changes to the GST Act in legislation to be tabled in the coming months.
The mistake was first discovered in an internal review by the Ministry of Finance in November 2023, when the ministry looked at how GST was charged on government fees and charges.

 

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Phasing out older payment cards in SimplyGo switch a ‘judgment error’, says Transport Minister​

Transport Minister Chee Hong Tat said the authorities will learn from the SimplyGo issue and do better in future. ST PHOTO: LIM YAOHUI
Esther Loi and Lee Nian Tjoe

FEB 13, 2024

SINGAPORE - The authorities made a “judgment error” in deciding to phase out older public transport payment cards for adults, and underestimated how commuters wanted to continue seeing fare information and card balances, said Transport Minister Chee Hong Tat.
“I apologise to our commuters for what happened,” said Mr Chee in an interview with reporters on Jan 26. “We will learn from this and we will do better in future.”
The Land Transport Authority (LTA) had announced on Jan 9 that it would retire the older card-based ticketing system – which ez-link and Nets FlashPay cards run on – by June 1. These cards were to be replaced by SimplyGo, an account-based system that processes fare payments at the back end, unlike the older system of storing transaction data on cards.
But the announcement was met with an outcry from passengers, who expressed frustration about their inability to see fare deductions and card balances when tapping out. Some who tried upgrading their ez-link cards on Jan 10 also faced delays due to a surge in transaction volume.
On Jan 22, Mr Chee said the Government will spend an additional $40 million to extend the lifespan of the card-based ticketing system and allow passengers to continue using the older payment cards.
Speaking to the media on Jan 26, he acknowledged that the LTA had underestimated the strong preference of some commuters who wanted to continue viewing fare deductions and card balances at fare gates and card readers.
“We understand your feedback and concerns. We respect your preferences. We want to give you this option to continue to be able to choose which system best meets your needs,” he added.

Mr Chee said LTA had consulted more than 1,000 commuters from 2020 to 2023 about SimplyGo.
LTA decided to retain the concession card system after receiving feedback from seniors, and placed machines at bus interchanges and MRT stations to make it easier for commuters to check their fare transactions and card balances without using the SimplyGo app, he noted.
“If we had consulted more widely, and gathered views from a wider group of commuters before we made the decision... we would have come across the stronger reactions and preferences that some commuters had expressed,” he said.

Asked if there is an optimal number of people to consult for such policies, Mr Chee said his ministry is reviewing this.
There is no fixed number to get a representative range of views, he said, adding that in hindsight, it would have been useful for the Government to hear a wider range of views and concerns on certain issues such as SimplyGo, which affects many people.
The additional $40 million will allow the card-based ticketing system to run till at least 2030.

LTA had previously said that fare deductions and card balances are not displayed at fare gates for payment cards under SimplyGo, as it takes a few seconds to retrieve the information from SimplyGo’s back-end system. This will slow the entry and exit of passengers and result in longer queues.
Mr Chee said he has tasked LTA to study how to improve SimplyGo’s features and the user experience.
Noting that there is no technical solution at the moment for the fare display issue, he said LTA will work with other government agencies and industry partners on this.
Commuters whom The Straits Times spoke to acknowledged Mr Chee’s apology, but hoped the Government would learn from this incident and improve how it handles similar situations in future.
Ms Serena Ng, 52, said the authorities “should do a better job before rolling anything out”.
The personal assistant added that the authorities should have carried out more user testing and got a greater understanding of the needs of commuters in different age groups before deciding on the transition.

Citing better communication as an area for improvement, Ms Ng said her own card upgrade process was not user-friendly, and her elderly parents were confused about whether concession cards could still be used under the new system.
Facilities management executive Nor Isran Kamsani, 43, who uses the old ez-link card for commuting, hopes that the authorities will not go back on their word to keep the old card-based system in operation, and that they continue to maintain it properly till 2030.
Communications manager Amanda Poh, 32, wants to see the Government follow through on its promise to review how it engages the public to get feedback.
“I don’t know the last time the Government apologised and reacted so quickly,” she said.

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Timeline: From ez-link to SimplyGo saga​

April 2002: Launch of original ez-link card​

Established by LTA, this rechargeable contactless card can be used across the public transport network.

September 2009: Switch to the Cepas ez-link card​

The new ez-link card can also be used for motoring and retail purposes, such as at carparks.

March 2017: Trial for contactless Mastercard bank cards​

More than 100,000 commuters pay via their Mastercard bank cards for an average of 60,000 daily journeys.

April 2019: Official launch of SimplyGo​

SimplyGo is introduced as an alternative payment method for public transport rides.

Jan 9, 2024: Replacement of old ticketing system with SimplyGo by June 1, 2024​

LTA announces that it would retire the old card-based ticketing system, requiring adult commuters to upgrade their older ez-link and Nets FlashPay cards to SimplyGo-compatible ones.

Jan 10: Inability of back-end systems to handle large volume of transactions​

Many commuters have trouble accessing the SimplyGo mobile app and upgrading their older cards at physical ticketing machines or ticket offices.

Jan 12: Outpouring of complaints on the inability to display fares​

Commuters raise concerns about not being able to see their SimplyGo card balances and fare deductions. While it is “technically possible” to do so, it would take a few seconds and slow down commuter flow, says LTA.

Jan 19: Postponement of free exchange of Nets FlashPay cards for SimplyGo-compatible ones​

Hours before the scheduled exchange is due to start on Jan 19, payment firm Nets says on Facebook that the card exchange service would be temporarily unavailable until further notice.

Jan 22: Shelving of plans to retire the old public transport payment system​

Following public dissent over the transition, LTA says that it will extend the use of the old card-based ticketing system.

Jan 26: Transport Minister Chee Hong Tat apologises for SimplyGo saga​

Calling this incident a “judgment error”, Mr Chee says that LTA should have consulted more commuters on their opinions about the transition.

 

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87,000 lasting powers of attorney to be retroactively validated after omission of statement found​

The omission of the statement in electronic LPAs was discovered in October 2023. ST PHOTO: DESMOND WEE

Syarafana Shafeeq

MAR 06, 2024

SINGAPORE - About 87,000 lasting power of attorney (LPA) documents will be retroactively validated after an omission of a required statement was found.
According to the Mental Capacity Act, LPAs are required to clearly state on the face of the document that it is intended to be a deed by the donor. An LPA is a legal document that allows one to appoint a trusted person to make decisions and act on their behalf if they lose their mental capacity. Those who make LPAs are known as donors, while the people they appoint are called donees.
About 87,000 LPAs certified electronically between Nov 14, 2022, and Jan 4, 2024, did not clearly state that it is a deed, and thus are not in compliance with the Mental Capacity Act, said the Ministry of Social and Family Development (MSF) on March 6.
The ministry apologised in a statement for the omission by the Office of the Public Guardian, one of its divisions. There were about 5,400 hard copy LPAs that were certified during this time period that were not affected.
Amendments to the Act were introduced in Parliament on March 6 by Senior Parliamentary Secretary for Social and Family Development Eric Chua, to retroactively validate the affected LPAs. MSF said it will do this as soon as possible to remove any uncertainty about their validity.
Those affected do not need to remake their LPAs, and no action is required by members of the public, it added.
In response to queries from The Straits Times, MSF said the decisions that were made by donees during the affected time period are legally valid despite the omission of the sentence. This is because the Mental Capacity Act affords legal protection to donees and third parties who rely on the registered LPA when they are unaware of the defects that may render the form invalid, it added.

The omission of the statement in electronic LPAs was discovered in October 2023. Electronic LPAs were made available on Nov 14, 2022, when the Office of Public Guardian Online system was launched.
The affected LPAs explained the significance and effect of an LPA, but did not directly state that it is a deed.
An assessment of the implications and required rectifications was completed in December 2023. MSF said that it then took immediate corrective action to include the required statement for electronic LPAs certified from Jan 5, 2024, onwards.