Electronic Tourist Refund Scheme (eTRS)
Inland Revenue Authority of Singapore

The Problem

The Tourist Refund Scheme (“TRS”) was introduced when Goods & Services Tax (GST) was implemented in Singapore in 1994. The Inland Revenue Authority of Singapore (IRAS) is the government agency that administers TRS, with the assistance of Singapore Customs (SC) at the airport.

Tourists pay GST when they purchase goods in Singapore. With the TRS, when tourists bring the goods out of Singapore when they leave, they may obtain refunds for the GST paid.

Tourism is an important sector of the Singapore economy. Last year, Singapore saw 11.6 million visitor arrivals. In total, $175 million were given in GST refunds for about $ 2.5 billion worth of tourists’ purchases of goods.
The traditional TRS operates fully on paper. When a tourist purchases goods from a TRS participating retailer, he needs to fill a paper form. The retailer checks the tourist’s eligibility before endorsing the form which the tourist would bring to the airport. At the airport, the tourist would visit the Customs Inspection Counter with the form and the purchases, so that the Customs Officer may verify the tourist’s eligibility, sight the purchases and endorse the forms. If tourists had made purchases from retailers that engage the services of Central Refund Agencies (CRA), the tourist would proceed to the CRA’s counter at the airport to receive his GST refund. For retailers that do not engage such services, the tourist would deposit the endorsed forms into the mailbox for the forms to be sent back to the retailers for the refunds to be processed.

Weaknesses of the paper-based TRS system
a) Repeated form filling by tourists.
Tourists must fill forms at each purchase, and are confronted with multiple form filling when they shop at several retailers.

b) Inconsistent shopping and refund experience for tourists
Tourists had to deal with differences in refund process and face inconsistent experience and confusion. For instance, different participating retailers use different refund forms, and the refund process for retailers that engage the services of CRA differs from those that do not.

c) Multiple queues to obtain refunds at airport
With 2 CRAs providing refund services in Singapore, tourists who purchase from retailers affiliated with these 2 CRAs, will have to queue up multiple times at the airport for cash refund. Unnecessary stress is created for tourists who have limited time before their flight departure.

d) Refunds not timely
Tourists receiving refunds by cheque often experience some delay and uncertainty in receiving refunds. Cheque refunds mailed by retailers may not reach the tourists due to lost mail.

e) Manual endorsement of all GST refund claim forms by Customs Officers
Customs Officers need to manually endorse every single claim form before the eligible refund claims may be processed. This is time-consuming and constrains capacity for a more risk-based approach.

Solution and Key Benefits

 What is the initiative about? (the solution)
To offer tourists a hassle-free and seamless shopping and GST refund experience in Singapore, IRAS took bold steps to introduce an electronic system to replace the paper-based system. Known as the Electronic Tourist Refund System (eTRS), the new system is the first government system in the world that allows retailers and multiple GST refund agencies to operate on a common platform.
The eTRS is a significant improvement over the paper-based system. With eTRS, tourists not only enjoy consistent experience when they purchase from different retailers in Singapore, they can also expect faster refund process at the airport.
At the point of purchase

When a tourist purchases goods from retailers participating in eTRS and wishes to seek GST refund, his purchase details will be captured and automatically sent and stored in a central database owned by IRAS. To identify his purchases, the retailer will issue an eTRS ticket printed from its point of sale system to the tourist, who no longer needs to fill up forms unlike under the paper-based system. For greater convenience, the tourist may even use a credit card as a token for tagging his purchases at the retailers. This token will link up all his qualifying purchases made from different shops. With the token, even if he misplaces his eTRS tickets, he can still claim for GST refunds at the airport.

At the point of claim

With eTRS, tourists approach the self-help kiosks at the airport to obtain refunds, without having to visit the Customs Inspection Counter.

At the self-help kiosk, the tourist swipes his passport and credit card (used as a token) or scans his eTRS tickets to automatically retrieve his purchase details. The kiosk will prompt the tourist to confirm his purchases and GST claims. The tourist may select the preferred payment mode (either cash or credit card) to receive his GST refund. If he opts for refund via credit card, he needs to confirm this at the kiosk and then proceed to board the plane. The refund will be automatically credited to his designated credit card account.

If he opts for cash refund, he would proceed to the Central Refund Counter in the Departure Transit Lounges to collect his cash refund on the spot. Even if he had made purchases from retailers affiliated to 2 CRAs, he can obtain cash refund at one counter. eTRS eliminates multiple queuing.

The entire refund process under eTRS takes only about 5 minutes, while the paper-based refund process take about 20 minutes.

If physical inspection of the goods is required, the kiosk will inform the tourist to proceed to Customs Counter before his refund claim can be processed. This is done on a selective basis.

With eTRS, tourists no longer need to queue at the Customs Inspection Counters to have all their claims manually endorsed. Also, tourists no longer need to queue at 2 different CRA counters nor post their endorsed forms to receive their GST refunds. Neither are there uncertainties of not receiving cheques in mail.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
Taking into account feedback from tourists and retailers on the problems faced by the paper-based system, the idea for an electronic system was first mooted during an inter-agency discussion involving IRAS, SC and Ministry of Finance (MOF) which is the parent Ministry for both agencies.

IRAS is the key driver and owner for eTRS. IRAS first consulted the key industry players to obtain a high level assessment of feasibility of technical solutions for eTRS, and to gain insights into what the main parameters should be for a comprehensive electronic system. After conceptualising the high level system design and determining the main parameters that meet desired outcomes, IRAS published a Request for Information (RFP) to formally invite proposals for solutions that meet our requirements as outlined. In other words, taking the RFP approach enables IRAS to set out the framework and high-level design IRAS required, but yet leave room for industry innovation i.e. interested parties may propose their own design for an electronic system that best meets IRAS’ requirements.

The tender was eventually awarded to Global Blue. IRAS has oversight of system implementation but besides working with Global Blue, IRAS extensively consulted other stakeholder agencies including Singapore Customs (SC), the Changi Airport Group (CAG) and Singapore Tourism Board (STB). Each of these agencies is responsible for areas that interface with tourist experience in Singapore and as the eTRS project traverses boundaries of these government agencies, it is imperative for IRAS to work closely with them.

IRAS also held dialogues with central refund agencies, major retailers and retail trade associations to obtain industry inputs.

Strong partnership was therefore forged among the various stakeholders to work towards the common objective of achieving a convenient eTRS that leads to a high level of tourist satisfaction.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
Strategic objectives of eTRS:

• To provide a consistent, hassle free and seamless GST refund experience for tourists
• To streamline the current processes to achieve efficiency

Strategies employed to achieve the strategic objectives:

a) Leveraging on technology to achieve a high Degree of Automation and efficiency
By replacing form filling with the electronic transmission of information, the current refund procedures are streamlined using technology to achieve efficiency throughout the whole refund process. The new process maximizes convenience for tourists while freeing up resources for retailers to focus on serving the tourists better. The eTRS self-help kiosk provides a one stop service that processes the tourist’s GST refund via credit card. With the use of technology, tourists’ transactions and information are stored, processed and managed efficiently in a central database.

The eTRS is developed based on open-standard technology to facilitate easy integration with participating Central Refund Agencies and retailers. This allows participation of multiple CRAs and Independent Retailers to encourage healthy competition and innovation among industry players resulting in competitive refunds and better service to tourists. The system adopts web services, server and storage virtualisation, rule-based process automation and data warehouse solution to achieve better system performance with high availability and scalability. This ensures that the new system is capable of handling large volumes of transactions that would commensurate with the present volume of tourist purchases as well as projected growth in tourist arrivals.

b) Centralizing the refund processing via a Central Refund Counter (CRC)
The processing of refunds is centralised at a single operator to handle both cash and non-cash refund (i.e. credit card refund) on behalf of all CRAs and Independent Retailers. The refund information is automatically routed to CRC operator for refund processing.

This provides convenience to tourists claiming cash refunds as they only need to queue once at the CRC. For tourist who opts for refund via credit card, he does not even need to queue at CRC as the refund will be made to his specified credit card account indicated at the kiosk. This is a major contrast with the paper-based system where the existence of multiple CRAs means multiple queues too.

c) Multi-agency Collaboration
Close coordination and collaboration with various stakeholder agencies including SC, CAG and STB was necessary to ensure the success of the initiative. Valuable inputs were sought from the stakeholders to ensure that the system design is user-friendly and the whole refund process is seamless.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
Key development and implementation steps were:

Obtain feedback/input
A project team was formed to brainstorm for ideas on developing an electronic system and to obtain feedback from various stakeholders (including the two CRAs) to explore the feasibility of introducing an electronic system for TRS.

In 2008, public consultation was held through publication of Request for Information to obtain feedback on the possible design and cost of implementing such a system.

Procurement and design requirements
Another cross-functional project team was formed to identify the high-level requirements for the Request for Proposal (RFP) which was published in end of 2008.

A number of proposals were received in response to the RFP. Evaluation was done and the development project was awarded in late 2009 to Global Blue.

The electronic system was rolled out for a 6-month pilot in May 2011. The pilot was planned for the participation of 500 retailers to test the robustness of the new system. The pilot ran in parallel with the existing paper-based system.

The pilot was successfully completed in mid Nov 2011 with about 1400 retailers participating in the new system.

Implementation & Launch
The new system was officially launched in Nov 2011. There is a 9-month transitional period (from Dec 2011 to Aug 2012) towards full implementation when the paper-based system will be phased out. During this transitional period, the remaining 2,100 retailers will join eTRS progressively, bringing the total number of retailers on the eTRS to about 3,500 by August 2012.

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
The project team faced a number of challenges right from the start. They are:

a) Seeking buy-in from existing retailers operating TRS
With the move from the paper-based refund system to the new electronic system, it is inevitable that some participating retailers may not be receptive to the use of technology. To achieve buy-in from the retailers and CRAs, advanced preparations were made to communicate the impending TRS changes to the stakeholders. Months before its implementation, consultations were conducted with various groups such as trade associations and major retailers operating TRS. Seminars were also organised to reach out to the retailers to share on eTRS and how the new system is going to impact them.

b) Garnering support & maintaining a high level of collaboration & coordination with external parties
The introduction of eTRS has an impact on the operations of multiple external parties and a high level of coordination and collaboration with the respective agencies are required. For instance,
IRAS worked closely with the Changi Airport Group (CAG) on the logistics and infrastructure to locate and set up the eTRS kiosks in areas easily accessible to tourists. Prominent signages are also designed to direct tourists to the kiosks. Taking into account feedback from CAG, IRAS also produced videos for tourist viewing at the airport, which demonstrate the step by step guide to obtain refund. IRAS also provided worked out operational procedures for Customs Officers who are also direct users of the system, and provided extensive training as well as support in enabling the Customs Officers to adjust to the new system. IRAS also engaged STB on communicating and publicizing the new system to tourists.

c) Raising awareness on eTRS and minimizing confusion to tourists during transitional period
During the transitional period where both the electronic and paper system co-exist, we need to minimize confusion to tourists. Moreover, with eTRS being new to tourists, some may be apprehensive about using credit cards as a token for linking purchases at the retailers. Tourists who are not IT-savvy would require assistance when using the eTRS self-help kiosks at the airport.
To create tourists’ awareness of eTRS, marketing and collateral materials such as eTRS logo, step-by-step tourist refund guides/brochures, murals, standees and instructional video guide were put in place. Brochures were distributed to main tourist touch-points at Singapore Visitors Centres, Changi Airport and shopping mall concierges.
At the airport, IRAS also deployed customer service officers (CSOs) on 3 rotating shifts to provide 24/7 assistance to the tourists in using the new system. Training sessions were conducted to ensure that these CSOs are well-equipped with both the technical knowledge and service skill sets.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
Technical resources
The development, operation and maintenance of the electronic system were outsourced to the vendor Global Blue.

Human resources
As this was an impactful project, the implementation efforts were led by the Deputy Commissioner for GST with regular reporting to the Commissioner. Staff from IRAS’s Information Technology (IT) division and business owner, Goods and Services Tax Division were mobilized to form 3 working groups to look into the IT, business requirements and public communications aspects. Representatives from Finance & Administration, Law and Corporate Communications Divisions were also appointed to deal with budgeting, contractual and publicity matters. These 3 groups were co-ordinated by a Steering Group chaired by the Deputy Commissioner.

GST Division provide and clarify business requirements with the vendor in the development of the system. The testing of the system was also performed by staff from GST Division with support from the IT division to ensure full functionality. Staff from Customer Service and Corporate Communications were deployed to look into the public engagement and communications aspects of the project including retailer engagement and tourist communications.

Financial cost
Development cost – S$6.5mil
Maintenance cost – S$11.5mil over 5-year period

Sustainability and Transferability

  Is the initiative sustainable and transferable?
The eTRS is a self sustaining system.
The Central Database (or Central Clearing House (CCH)) is owned by IRAS; IRAS pays for the development, operation and maintenance of the system and receives revenue from transaction fees charged to the CRAs or IRs, on full cost recovery basis.
The Central Refund Counter (CRC), operated by a vendor, is a paying agent that makes refunds to tourists on behalf of the CRA/IR. The CRC is appointed by IRAS who in turn regulates the CRC fees and charges. .

The participating Central Refund Agency/ Independent Retailer pays fees to IRAS for each transaction processed by CCH and to CRC for each transaction refunded by the CRC to the tourist. The CRA/IR in turn recovers costs via fees charged to tourists (which is net off the amount of GST to be refunded on purchases) for issuing the refunds.

eTRS will hence be a self-funding system for IRAS and for participating CRAs/IRs.

Currently, the eTRS is the first government system in the world that allows retailers and multiple GST refund agencies to operate on a common platform and provide tourists a consistent shopping experience wherever they shop in the country. The vendor who owns the intellectual property for the original electronic system will be promoting this system to tax administrations in other countries.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
Impact of eTRS

Since its implementation in May 2011, the eTRS system has received many positive feedback from tourists and retailers. In a recent survey conducted on about 800 tourists, more than 90% said that the eTRS kiosks is easy to use and 95% said that they are satisfied with the eTRS claim process.

Six months following its implementation, the eTRS system has successfully approved close to 200,000 GST refund claims.

The eTRS is yet another achievement by IRAS in its continual commitment to bring about greater convenience and satisfaction to taxpayers, be it in paying their taxes or receiving tax refunds.

Lessons Learnt

i) Make Bold Plans With Your Customers In Mind
In the quest to deliver better services to our customers, it is essential to make bold plans.

The paper-based TRS system has worked for Singapore, its tourists and thousands of retailers for close to 20 years. IRAS nevertheless took a big step to replace a tried and tested system with an innovative electronic system that changes the entire landscape for tourist refund in Singapore. For the new system to work well, IRAS partnered stakeholders and consulted industry extensively. IRAS’s efforts are being affirmed by the resounding positive feedback from tourists.

ii) Understand Your Customer’s Needs
The key motivation for IRAS in implementing eTRS was to improve tourist experience and this formed the centre-piece for designing the new system. Hence, much emphasis was placed on tourist experience and understanding the needs of tourists seeking refunds.

Hence, IRAS was able to deliver on a new system that meets the needs of tourists from the point of purchase, to the point of claiming, all the way to receiving GST refunds.

iii) Communicate, Communicate, Communicate
For a change to be successful, communication to all stakeholders must be clear and adequate. IRAS recognises the importance of communicating to stakeholders on the new system through various platforms of engagement, so that the switch will be smooth and confusion to tourists minimised.

Communication materials in various languages were also made widely available to tourists, so that they can understand and enjoy the benefits of the new system with ease.

iv) Create Win-Win Situation with Stakeholders
One of the critical successful factors of the initiative is the close coordination and collaboration with various stakeholder agencies including SC, CAG and STB. To garner support from these agencies, a win- win situation need to be worked out so that common goals can be fostered to ensure the success of the initiative.

Contact Information

Institution Name:   Inland Revenue Authority of Singapore
Institution Type:   Government Agency  
Contact Person:   Ernest Lee
Title:   Director (Organisational Excellence)  
Telephone/ Fax:   63513037
Institution's / Project's Website:   www.iras.gov.sg
E-mail:   ernest_lee@iras.gov.sg  
Address:   55 Newton Road, Revenue House
Postal Code:   307987
City:   Singapore
State/Province:   Singapore
Country:   Singapore

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