In an effort to build a smart nation, Singapore has decided to make the Wage Credit Scheme for eligible employers completely cashless from March, 2020.
The Wage Credit Scheme is a national policy that co-funds the increase in wages that employers provide to their workers. According to the new policy, eligible employers will no longer receive a cheque, but instead, will have cash directly transferred to their accounts.
The Ministry of Finance (MoF) and the Inland Revenue Authority of Singapore (IRAS) has issued a joint statement on this matter.
To facilitate its smart nation efforts, the Singaporean Ministry is bringing on board online payment platforms, PayNow Corporate and Giro. Employers will have to open an account on either of the two platforms to be considered for the cashless scheme.
The MoF and IRAS will inform eligible employers by the end of March next year, and have urged all companies to open a PayNow or Giro account. The payment will be made through these two platforms only.
The Wage credit scheme was introduced for the first time in 2013 and was originally intended to function for the next three years only. However, in 2015 and 2018 it was extended to support businesses which were trying to transform and to encourage the sharing of profits with the employees.
More than 90,000 employers have received over 600 million dollars in pay-out under the scheme. And around 70 per cent of the total funds went to small and medium-sized companies.