It’s income tax season again, where all law-abiding taxpayers come together for the greater good of nation building. And miles.
Although IRAS does not directly accept credit cards for income tax payments, there are several schemes by different banks that allow you to earn miles for a processing fee when you pay with certain credit cards through their tax payment facility.
There are minor differences in the process for each bank, but the generalized flow is:
- You complete an application form and provide the bank with your copy of the Notice of Assessment (NOA), which states how much tax is due from you
- The bank approves your application and credits the tax due amount to your personal bank account, in cash. It also charges your credit card for the commensurate amount, plus a processing fee
- You use the cash to pay off your tax bill, then pay off your credit card bill as per normal
- The tax due amount earns miles/points at the prevailing credit card rate (except OCBC Voyage where it’s fixed at 1 VM per $1)
Under such programs, you’re only allowed to pay your own tax. The NOA you submit must be your own, and you can’t make payments on behalf of other people. The funds you obtain are also capped at the amount of tax due, eg if your tax bill is $10,000 you can’t ask the bank to credit $20,000 to your account.
The problem is that most of these tax payment facilities are for fairly high-level credit cards, the type that require annual incomes in excess of $120K to obtain. Fortunately there’s also Cardup, which charges a flat 2.6% processing fee and lets you use the card of your choice to pay.
Fundamentally this all boils down to cost per mile, so let’s see how the different options stack up.
|Method||Processing Fee||Earn Rate||Cents Per Mile|
|Standard Chartered Visa Infinite (≥$2K spend p.m)||1.6%||1.4||1.14|
|HSBC Visa Infinite (≥$50K spend in prev year)||1.5%||1.25||1.20|
|HSBC Premier Mastercard||0.5%||0.4||1.25|
|ipaymy with BOC Elite Miles World Mastercard||2.25%||1.5||1.47|
|HSBC Visa Infinite (<$50K spend in prev year)||1.5%||1.0||1.50|
|ipaymy with UOB PRVI Miles||2.25%||1.4||1.57|
|Standard Chartered Visa Infinite (<$2K spend p.m)||1.6%||1.0||1.60|
|Cardup with BOC Elite Miles World Mastercard||2.6%||1.5||1.69|
|Cardup with UOB PRVI Miles||2.6%||1.4||1.81|
|UOB Visa Infinite Payment Facility||2.0%||1.0||2.00|
|UOB PRVI Pay||2.1%||1.0||2.10|
*Why isn’t the calculation= processing fee/earn rate? Remember that when you pay with Cardup, you earn points on both the Cardup processing fee and the amount charged to your card. For example, suppose I pay $1,000, which after a 2.6% fee becomes $1026. At a rate of 1.4 mpd, I earn 1,436 miles (this isn’t technically correct because of rounding, but when you use larger number the rounding becomes negligible). Therefore my effective cost per mile is 26/1,436= 1.81 cents per mile.
There are other options out there such as using your DBS Altitude and the DBS Tax Payment facility (2.5 cpm), but remember that the gold standard for buying miles in Singapore is 2 cpm, because this is the price you could buy unlimited miles through PRVI Pay with the UOB PRVI Miles card.
Now that 0.63 cpm figure with Citibank Rewards and Cardup is going to turn a lot of heads. This has been widely reported by users on the Telegram Group, and I’ve managed to confirm it myself (I used the Citibank Rewards Visa, but there’s no reason why Mastercard shouldn’t have the same benefit).
This is certainly exciting, but as with all things in the miles and points game, Citibank could easily stop offering this at any point. And since it’s technically not one of the covered categories of bags, shoes and clothes, good luck lodging an appeal. I’ve always said that 10X cards are high risk high reward, and indeed if you pay with your Citibank Rewards card and end up getting 1X (0.4 mpd), a 2.6% fee means 6.3 cents per mile. So by all means try, but I don’t want no pitchforks and torches if you don’t get it.
Update: Cardup has let me know that it’s a sooner rather than later thing that they’ll get reclassified as a non 10X category. So unless you’re planning to pay real soon, I’d act with caution here.
If you’re new to Cardup you can get $20 off the processing fee on your first payment using the referral code AARONW54
If this code gets exhausted or you simply feel like showing love elsewhere, you can check out the long list of community referral codes in this thread (please do not post referral codes in the comments here as it makes more sense to keep all of them in one place).