2023 Edition: Earning credit card miles on IRAS income tax

It’s the most wonderful time of the year: tax season!

Here’s what you probably know already: Individuals with income tax obligations will need to file their taxes by 18 April 2023. They’ll subsequently receive their tax bill (NOA) from the end of April onwards. 

IRAS sends NOAs in batches, so you may not receive yours at the same time as others in your household or company. Don’t take it personally; I promise they haven’t forgotten about you.

Tax Season 2023

💰 The MileLion’s Income Tax Guide 2023

How do I pay income taxes with a credit card? What are the fees involved? What are my options? Other important things to note

As law-abiding citizens, let us all, young and old, gather together to ensure a proper accounting of our earnings towards the sacred goal of nation-building.

Oh, and credit card rewards.

How do I pay my income tax bill with a credit card?

IRAS doesn’t accept credit card payments. In their own words:

Credit card payments are not offered by IRAS directly because of the high transaction costs charged by the credit card service providers. This is to keep the cost of collection low to preserve public funds.

However, this doesn’t mean you can’t use your credit card to pay taxes. Banks and third party-providers offer tax payment facilities, which allow cardholders to earn rewards in exchange for a small fee. I divide these into “indirect” and “direct”.

Indirect Payment Facilities	Direct Payment Facilities

Both indirect and direct facilities work the same in the sense that your credit card is charged for the tax amount due plus an admin fee, earning miles in the process. 

Where they differ is that:

• An indirect payment facility deposits the amount due into your designated bank account, in cash. You’re still responsible for paying IRAS
• A direct payment facility pays IRAS on your behalf

Whether it’s better to use an indirect or direct facility all boils down to the cost per mile: the admin fee, divided by the miles you earn. 

What’s changed for YA2023?

The biggest loss for YA2023 tax season has no doubt been the nerfing of GrabPay-AXS.

Back on 16 January 2023, GrabPay removed support for AXS transactions, ending an era of free miles and cashback on income tax payments (and many other bills). For the past few years, I’d been paying off my entire tax bill via the AMEX HighFlyer-GrabPay-AXS trinity, minting thousands of miles at zero cost. And even if you didn’t qualify for an AMEX HighFlyer Card, you could save 1.5% off your tax bill by using the AMEX True Cashback Card (as the icing on the cake, both will nerf GrabPay top-ups from 4 April 2023).

With the loss of GrabPay-AXS, there’s basically no way left to earn free miles on income tax payments. If you want to earn miles, you’ll need to pay- simple as that.

In addition to this, HSBC has shutdown its Income Tax Payment Programme. This was one of the lowest cost options out there, allowing HSBC Visa Infinite Cardholders to buy miles from just 1.2 cents apiece. 

While not strictly speaking a tax payment facility (though it can certainly be used for paying tax), the UOB Payment Facility has also hiked its rates from 1.7-1.9% to 1.7-2.1%. 

What are the fees involved?

Here’s a list of the various payment facilities and the applicable fees. 

🧾 List of Payment Facilities
Bank	Applicable Cards	Admin Fee
Link	SCB Visa Infinite	1.6%
Link	UOB PRVI Miles, Visa Infinite Metal, Reserve	1.7-2.1%
Link	All cards except HSBC	1.75% (Visa) 1.99% (MC) 2.6% (AMEX)
Link	OCBC VOYAGE	1.9%
Link	All SCB cards	1.9%
Link	All Citi cards	2.2%
Link	All DBS cards	2.5%
Key	Indirect	Direct
There is an additional option called ipaymy, but for reasons outlined in this post, I do not endorse nor comment on their services

It may be tempting to compare options on the basis of admin fees, but that’s only half the story. You need to also consider the earn rate.

For example, the OCBC VOYAGE Payment Facility has an admin fee of 1.9%, but the earn rate is 1 mile per S$1 charged (instead of the usual 1.3 mpd). This means the cost per mile is 1.9 cents.

In contrast, Citi PayAll has a higher admin fee of 2.2%, but the Citi PremierMiles Card earns 2.2 miles per S$1 charged. This means the cost per mile is lower then VOYAGE, at 1 cent.

Do keep in mind that banks may apply different earn rates for income tax payments as opposed to regular retail spend. For example:

• the UOB PRVI Miles Card normally earns 1.4 mpd, but awards 1 mpd for UOB payment facility transactions (you’ll earn 1.4 mpd via CardUp, though)
• all DBS cards earn a flat 1.5 mpd for income tax payment plans, instead of their usual rates. 

If this is too complicated for you, the next section should make everything very simple. 

What are my options for paying tax with a credit card?

Here’s how much you can expect to pay for miles with various miles and points cards. 

A few things to note:

• We’re bound to see additional offers added in the weeks ahead. I’ll be updating this article as and when new offers come online, so bookmark this page for future reference. 
• Some of the CardUp promo codes below have limited redemptions; click on the link to read the T&Cs

💰 Summary of Tax Payment Options
Card	Pay Via	Fee  (MPD)	CPM
OCBC VOYAGE (Premier, PPC, BOS)	CardUp	1.5% (1.6 mpd)	0.92
Use CardUp with OCBC15, valid for new users only till 3 Jan 24. Existing users use MLTAX23 for 1.75% fee (1.07 cpm) till 31 Aug 23
Citi Rewards	PayAll	2.2% (2.2 mpd)	1.00
Use Citi PayAll; min. spend of S$8K applies
Citi Prestige	PayAll	2.2% (2.2 mpd)	1.00
Use Citi PayAll; min. spend of S$8K applies
Citi Premier Miles	PayAll	2.2% (2.2 mpd)	1.00
Use Citi PayAll; min. spend of S$8K applies
Citi ULTIMA	PayAll	2.2% (2.2 mpd)	1.00
Use Citi PayAll; min. spend of S$8K applies
DBS Insignia	CardUp	1.75% (1.6 mpd)	1.07
Use CardUp with MLTAX23 till 31 Aug 23
UOB Reserve	CardUp	1.75% (1.6 mpd)	1.07
Use CardUp with MLTAX23 till 31 Aug 23
OCBC 90°N Card	CardUp	1.5% (1.3 mpd)	1.14
Use CardUp with OCBC90N15, valid for new users only till 3 Jan 24. Existing users use MLTAX23 (Visa) or MCTAX23 (Mastercard) for 1.75% fee (1.32 cpm) or 1.99% fee (1.5 cpm) till 31 Aug 23
OCBC VOYAGE	CardUp	1.5% (1.3 mpd)	1.14
Use CardUp with OCBC15, valid for new users only till 3 Jan 24. Existing users use MLTAX23 for 1.75% fee (1.32 cpm) till 31 Aug 23
SCB VI	SCB	1.6% (1.0/1.4 mpd)	1.14   1.6
Use SC Tax Payment Facility. Earn 1.4 mpd with ≥S$2K spend per statement month (includes tax payment), otherwise 1 mpd
OCBC Premier VI	CardUp	1.5% (1.28 mpd)	1.15
Use CardUp with OCBC15, valid for new users only. Existing users use MLTAX23 for 1.75% fee (1.34 cpm) till 31 Aug 23
DBS Vantage	CardUp	1.75% (1.5 mpd)	1.15
Use CardUp with MLTAX23 till 31 Aug 23
AMEX PPS Card	CardUp	1.6% (1.3 mpd)	1.21
Use CardUp with AMEX16N, valid for new users only till 14 Apr 23. Existing users pay regular 2.6% fee (1.95 cpm)  FULLY REDEEMED
AMEX Solitaire PPS Card	CardUp	1.6% (1.3 mpd)	1.21
Use CardUp with AMEX16N, valid for new users only till 14 Apr 23. Existing users pay regular 2.6% fee (1.95 cpm)  FULLY REDEEMED
UOB PRVI Miles Visa	CardUp	1.75% (1.4 mpd)	1.23
Use CardUp with MLTAX23 till 31 Aug 23
UOB VI Metal	CardUp	1.75% (1.4 mpd)	1.23
Use CardUp with MLTAX23 till 31 Aug 23
AMEX KrisFlyer Ascend	CardUp	1.6% (1.2 mpd)	1.31
Use CardUp with AMEX16N, valid for new users only till 14 Apr 23. Existing users pay regular 2.6% fee (2.11 cpm)  FULLY REDEEMED
UOB PRVI Miles MC	CardUp	1.99% (1.4 mpd)	1.39
Use CardUp with MCTAX23 till 31 Aug 23
AMEX KrisFlyer Credit Card	CardUp	1.6% (1.1 mpd)	1.43
Use CardUp with AMEX16N, valid for new users only till 14 Apr 23. Existing users pay regular 2.6% fee (2.3 cpm)  FULLY REDEEMED
DBS Altitude Visa	CardUp	1.75% (1.2 mpd)	1.43
Use CardUp with MLTAX23 till 31 Aug 23
SCB X Card	CardUp	1.75% (1.2 mpd)	1.43
Use CardUp with MLTAX23 till 31 Aug 23
AMEX Centurion	CardUp	1.6% (0.98 mpd)	1.61
Use CardUp with AMEX16N, valid for new users only. Existing users pay regular 2.6% fee (2.59 cpm)  FULLY REDEEMED
KrisFlyer UOB	CardUp	1.99% (1.2 mpd)	1.63
Use CardUp with MCTAX23 till 31 Aug 23
DBS Altitude AMEX	DBS	2.5% (1.5 mpd)	1.67
Use DBS Payment Plans
UOB PRVI Miles AMEX	CardUp	2.6% (1.4 mpd)	1.81
Use CardUp
AMEX Platinum Charge	CardUp	1.6% (0.78 mpd)	2.02
Use CardUp with AMEX16N, valid for new users only till 14 Apr 23. Existing users pay regular 2.6% fee (3.25 cpm)  FULLY REDEEMED
AMEX Platinum Credit Card	CardUp	1.6% (0.69 mpd)	2.28
Use CardUp with AMEX16N, valid for new users only till 14 Apr 23. Existing users pay regular 2.6% fee (3.67 cpm)  FULLY REDEEMED
AMEX Platinum Reserve	CardUp	1.6% (0.69 mpd)	2.28
Use CardUp with AMEX16N, valid for new users only till 14 Apr 23. Existing users pay regular 2.6% fee (3.67 cpm)  FULLY REDEEMED

Other important points to note

Apply for as many facilities as you want

If you hold more than one of the cards above, there’s nothing stopping you from applying for multiple tax payment facilities in order to buy more miles (otherwise known as churning).

For example, someone with a S$10,000 tax bill could apply for both the SCB Visa Infinite tax payment facility and set up a payment arrangement with CardUp. 

Take particular care if you’re applying for two direct payment facilities, however, because overpaying your tax bill will trigger a refund from IRAS, and a possible clawing back of the miles by the bank. 

There’s no chance of this happening with indirect payment facilities, because the onus is on you to pay IRAS. What you do with the cash after it’s deposited into your account is your own business.

You can still use GIRO

IRAS allows taxpayers to split their payment into 12 interest-free instalments via GIRO. This is great for maximizing your cashflow, and something I opt for each year.

Setting up GIRO for income tax can be done via the following methods:

• Instant
  • myTax portal (DBS/POSB and OCBC customers)
  • Internet banking (DBS/POSB, OCBC and UOB customers)
  • AXS stations (DBS/POSB customers)
• 3 weeks processing
  • GIRO application form (all bank customers)

Once your GIRO arrangement has been approved, you can view the monthly instalment by logging to myTax Portal, selecting Account > View Payment Plan > View Plan.

There are no issues using GIRO if you opt for an indirect payment facility, as the bank simply credits the cash to your account, and how you go about paying IRAS after that is up to you.

It’s also possible to use GIRO when you’re paying via a direct payment facilities, though you’ll want to make manual payments well in advance of each month’s scheduled deduction (on the 6th of each month) to avoid double payment. 

To illustrate, suppose your tax bill is S$12,000 and you opt for GIRO. IRAS will split your tax bill such that S$1,000 comes due each month. 

Suppose you make a manual payment of S$400 in July 2022. According to your payment schedule, you were supposed to pay S$1,000 in July, so GIRO will automatically adjust to deduct S$600 instead of S$1,000 for that month. 

Then suppose you make a manual payment of S$1,500 in September 2022. According to your payment schedule, you only needed to pay S$1,000 in September, so GIRO won’t take any deduction for this month. 

When October 2022 comes round, assuming you make no further manual payment, GIRO will deduct S$500 to put you “back on schedule” with S$6,000 paid off by the end of October 2022. 

Now, it’s important to keep in mind that IRAS GIRO deductions take place on the 6th of the month the tax is due (or the next working day if that happens to be a weekend or public holiday). If your manual payment is made close to this date, it’s possible the regular GIRO deduction will still take place. 

Based on data points shared in the Telegram Group, the cut off is the last day of the month before, so if you make a manual payment on 1 April, the reduction will be in effect for May’s taxes. In any case, the CardUp system won’t let you schedule payments during the last few and first few days of each month. 

For more instructions on how to setup a recurring income tax payment series with CardUp, refer to this link. 

Other factors to consider

When evaluating two cards with similar cost per mile figures, it’s helpful to think of qualitative factors as well

• Do points expire?
• Do points pool?
• How many transfer partners are available?
• Is there a fee for transferring points?

For example, Citi Miles would be superior to DBS Points or UOB UNI$, thanks to the sheer number of transfer partners available. Likewise, non-expiring Citi Miles and 90°N Miles would be more useful than expiring UNI$ or HSBC Rewards Points.

Conclusion

Income Tax Season 2023 is now underway, and while no one enjoys paying taxes, a glass-half-full person might see this as a good opportunity to buy miles at a reasonable price. 

I will be updating this article as new tax payment promotions are announced, so be sure to bookmark it for future reference.