SINGAPORE – A new service from the taxman is making life much easier for charity executive Lai Zhiyang and others in the sector.

Mr Lai had to take time out from the duties of running his organisation’s operations to file records with the tax authority when donations arrived.

He got some relief from that cumbersome, time-consuming process in May, when the Inland Revenue Authority of Singapore (Iras) released the Donation Submission API (Don-API) service.

This enables Institutions of a Public Character (IPCs) – a status accorded to charities authorised to issue tax deduction receipts for qualifying donations – to submit records to the authority via certain online platforms.

Mr Lai, 32, the manager of the Bukit Timah Seu Teck Sean Tong Institution, said: “The new service is a great help for smaller charities, where resources are considered stretched at times.”

His organisation offers free traditional Chinese medicine treatment to the public, and has a team of around 20 staff, including just two administrative employees, Mr Lai being one.

“Another big difference between this software and the previous system is the ability to have a customised thank-you letter or receipt... That adds quite a bit of value to our donors and the organisation,” Mr Lai told The Straits Times.

He added that using the Don-API service on the free iShine Cloud is much cheaper than using other applications.

It also allows multiple users to view donation records simultaneously, he said. “Now, we don’t need to dedicate a certain amount of time just to do these tasks.”

Donors get tax deductions of 2½ times the qualifying donation amount for donations made to IPCs. These charities must submit records of tax-deductible donations made in the preceding year by Jan 31 annually.

Around 70 per cent of the more than 700 IPCs in Singapore have adopted donation management software that supports the Don-API service, which allows the software to connect directly with Iras systems.

The service has cut the time taken for IPCs to submit donation records to just under five minutes, compared with more than half an hour previously, said Iras.

It was progressively rolled out to IPCs from April, and will be the only way for them to submit donation records from Jan 1, 2024.

This means that all donation records for 2023 must be submitted to the authority through the digital service.

Iras told ST that 10 digital service providers have integrated the service into their donation management software, with more to come.

The initiative started as a pilot in 2022 with two digital service providers – GivePlease and iShine Cloud – making the service available to their IPC clients for submissions in 2023. 

IPCs previously had to submit donation records using two offline applications.

Manually generating records and uploading files across different applications may cause data discrepancies and possible errors, Iras noted.

IPCs can either integrate their current software with the Don-API service or adopt one where the service has already been integrated.

The taxman worked with the Ministry of Culture, Community and Youth and the National Council of Social Service to engage IPCs.

“This Don-API service was introduced as part of Iras’ efforts to collaborate with partners to develop meaningful digital solutions that integrate tax into taxpayers’ and partners’ natural systems,” it said.