It’s the most wonderful time of the year once more- tax season, where we all render to Caesar in the name of nation (and miles) building.
Individuals with income tax obligations will need to file their taxes between 1 March and 18 April 2019. You’ll subsequently receive your tax bill (NOA) between the end of April and September 2019. IRAS sends NOAs in batches, so don’t feel left out if everyone else gets theirs before you do.
Although IRAS does not directly accept credit cards for income tax payments, there are several third-party options that enable you to do this. In this guide, we’ll compare the options available and the relative cost of buying miles through each.
How do I pay my tax bill with a credit card?
Bank payment facilities
Certain banks allow cardholders to charge income tax bills to their credit cards, and earn points in exchange for a small processing fee.
The following banks currently offer tax payment facilities for selected cards:
*UOB technically doesn’t offer a tax payment facility, but there’s no reason why you can’t use PRVI Pay to achieve the same end
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 a copy of your NOA
- The bank approves your application and credits the tax due to your personal bank account, in cash. It also charges your credit card for the corresponding amount, plus a processing fee
- You use the cash to pay your tax bill directly to IRAS, then pay your credit card bill as per normal
- You earn credit card points from the amount charged to your credit card
A few points to note:
- The bank does not pay IRAS on your behalf- that’s still on you!
- The NOA you submit must be your own; you can’t make payment on behalf of other people
- The maximum amount you can request is capped by your tax bill, e.g. if your tax bill is $10K, you can’t ask the bank to charge you $20K
In addition to bank facilities, you can also opt to pay your taxes with a credit card through a payment platform like CardUp. Note that the newly-launched Citi PayAll does not yet support tax payments, but it is possible they will add this service in the next couple of weeks.
How much does it cost?
Here’s a summary of how much you’ll be paying per mile with each of the different options. Remember that a “quick and dirty” valuation of a mile is about 2 cents.
|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|
Do take note of the following:
- ipaymy is no longer accepting new personal account sign ups
- In light of the BOC Elite Miles World Mastercard’s currently in-flux T&Cs, I’d be careful about making Cardup/ipaymy payments with this card at the moment. BOC has not yet responded to my questions regarding the new T&Cs
- Bank of China offers a tax payment facility for selected cards but not the BOC Elite Miles World Mastercard
Unfortunately, the best ways of buying miles through tax payments are also the most inaccessible: you need a minimum income of $120K and $150K to hold an HSBC Visa Infinite and SCB Visa Infinite respectively, an a minimum AUM of $200K to get a HSBC Premier Mastercard.
Given my current situation, I’d generally be alright with anything south of 1.7 cents per mile, but everyone’s individual valuation is going to differ.
Back in the day there used to be some pretty fantastic ways of earning miles on your credit cards without any admin fee at all (hint: AXS, Masterpass, and a certain bags, shoes and clothes card). Unfortunately those loopholes have long been shut, and if you want to earn miles for nation building, you’re going to have to pay for the privilege.
While writing this article, an interesting thought came to mind: no bank will let you charge more than the tax due amount shown on your NOA. However, since the ultimate settlement is between you and IRAS, there’s nothing stopping you from applying for multiple tax payment facilities, assuming you qualify. That’s to say, I could apply for both the HSBC Visa Infinite and Standard Chartered Visa Infinite tax facility to enjoy their relatively low cost miles.
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