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

The Problem

The Tourist Refund Scheme (“TRS”) was introduced in Singapore to allow tourists to make a claim of the Goods and Services Tax (GST) paid on their purchases when they leave Singapore with the goods. Since its introduction in 1994, the GST refund application was administered through paper forms issued by the retailers.

Under this paper-based refund system, tourists would be confronted by different types of GST refund application forms when they make purchases at different retail shops. Tourists would have to take time to complete the forms manually for each purchase. Before leaving Singapore, tourists are required to get their refund forms stamped by Singapore Customs (SC) through inspection of the goods purchased. With the stamped refund forms, tourists have to queue at different refund counters if the purchases were made from retailers operating through different Central Refund Agencies (CRA) to collect their cash refund. For purchases made from retailers that self-administer the scheme instead of engaging the services of a CRA, the tourists would have to mail back the stamped forms to the retailers for processing of refunds.


Weaknesses of the paper-based refund system:

• Inconsistent shopping and refund experience for tourists
Depending on whether the retailer is self-administering the scheme or engaging the services of a CRA, the design of the refund forms and processing of refund can vary from one retailer to another, resulting in an inconsistent shopping experience for the tourists.

• Repeated form filling by tourists
Tourists are required to fill up the refund forms manually for each purchase when they shop at several retail shops. This can be burdensome as some details such as personal particulars have to be filled up repeatedly.

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

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

• Longer transaction time by retailers
Retailers are required to assist tourists with the completion of refund forms when necessary. This means a longer transaction time spent on the tourist customers which lengthens the cashiering process.

• Printing and storage costs incurred by retailers
Retailers incur costs of printing the refund forms and the need to make space for storing the refund forms.

• Manual endorsement of all GST refund claim forms by Singapore Customs Officers
Singapore Customs (SC) Officers are expected to manually stamp on every single claim form before the eligible refund claims may be processed. This is time-consuming and counter-productive.

Solution and Key Benefits

 What is the initiative about? (the solution)
To offer tourists a hassle-free and seamless experience when they shop in Singapore, the Inland Revenue Authority of Singapore (IRAS) took bold steps to introduce the Electronic Tourist Refund Scheme (eTRS) in May 2011.
The eTRS is the first government system in the world that allows retailers and multiple GST refund agencies to operate on a common platform. It works on a unique business model that is self-financing for IRAS and yet commercially viable for the CRAs.
In a recent survey conducted on close to 3,000 tourists, 96% expressed satisfaction with the eTRS claim process. The GST refund claim process that used to take 20 minutes, now takes just 3 minutes to process. In addition, the centralisation of refund processing under one single operator allows tourists to enjoy greater certainty in receiving their GST refunds.
Besides delivering a superior experience for tourists in claiming refunds, the eTRS has also resulted in improved productivity for retailers as eTRS eliminates the hassle of form filling for each tourist purchase. SC can now conduct more thorough and targeted checks during goods inspection for cases that are flagged out by the kiosk.
For IRAS, eTRS leads to improved intelligence and audit efficiency. Having all transactions stored centrally in a database facilitates data analysis and profiling, thus improving the efficiency of TRS audit work.
By providing a hassle free experience for tourists, eTRS has indeed transformed the entire eco-system for tourist shopping and refund claims. This customer-centric initiative has helped strengthen Singapore’s position as a premier shopping destination.

eTRS Refund Process
At each point of purchase, tourists can choose to assign the same credit/debit card as a token to link up all their purchase details made from different retail shops. The token will enable the tourists to retrieve their purchase details at one go when applying for refund via the self-help kiosk at the point of departure. The purchase details captured will be automatically sent and stored in a central database owned by IRAS. Regardless of whether a token is used, the retailer would have to issue an eTRS ticket printed from its point-of-sale system to the tourist, in addition to the receipt or tax invoice. Hence, tourists who do not use a token or misplaces the token can still use the eTRS tickets as an alternative to retrieve their purchase details when making a refund claim.


When departing from Singapore, the tourists can approach any self-help kiosk at the airport to apply for the GST refunds, by simply swiping their passport and credit/debit card (used as a token) or scanning the eTRS tickets to automatically retrieve their purchase details for verification. Upon confirming the purchases and the refund claims, the tourists may select the preferred refund mode, that is credit card refund or cash refund. For credit card refund, the refund will be automatically credited to the tourists’ specified credit card account. For cash refund, tourists can collect cash from the Central Refund Counter in the Departure Transit Lounge.

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 of 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 Proposal (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 an oversight of system implementation and besides working closely with Global Blue, IRAS has also extensively consulted other stakeholder agencies including SC, the Changi Airport Group (CAG) and Singapore Tourism Board (STB). Each of these agencies is responsible for areas that interface with tourists’ experience in Singapore. 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 CRAs, 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 led to a high level of tourists’ 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 maximises 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 tourists’ 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 CRAs and retailers. This allows participation of multiple CRAs and Independent Retailers (IRs) 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 tourists’ purchases as well as projected growth in tourist arrivals.

b) Centralising 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 IRs. 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 tourists who opt for refund via credit card, they do not even need to queue at CRC as the refund will be made to their specified credit card account indicated at the kiosk. This is a major contrast with the TRS where the existence of multiple CRAs meant multiple queues too.


c) Multi-agency Collaboration
Close coordination and collaboration with various stakeholder agencies including SC, CAG and STB were necessary to ensure the success of the initiative. Valuable inputs were sought from the stakeholders to ensure that the system design was user-friendly and the whole refund process 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 August 2008, IRAS published a ‘Request for Information’ (RFI) on the revamp and operation of Tourist Refund Scheme for GST incurred in Singapore. The RFI spelt out the desirable outcomes of the electronic system and invited non-binding submissions from potential suppliers on how these outcomes can be achieved. The RFI also alerts the industry that a RFP will be published subsequently. We received 7 submissions through the RFI.
Procurement and design requirements
Another cross-functional project team was formed to identify the high-level requirements for the RFP which was published at end of 2008.

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

Pilot
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 November 2011 with about 1400 retailers participating in the new system.

Implementation and Launch
The new system was officially launched in November 2011. There was a 9-month transitional period (from December 2011 to August 2012) before the eTRS fully replaced the paper-based TRS on 19 August 2012. During this transitional period, the remaining 2,100 retailers successfully converted to electronic system, bringing the total number of retailers on the eTRS to about 3,500 by August 2012. All retailers administering tourist refund are now on eTRS.

(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 TRS to the eTRS it was inevitable that some participating retailers would not be receptive to the use of technology. To achieve buy-in from the retailers and CRAs, IRAS communicated the impending TRS changes to the stakeholders. Months before its implementation, IRAS consulted various groups such as trade associations and major retailers operating the 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 CAG on the logistics and infrastructure to locate and set up the eTRS kiosks in areas easily accessible to tourists. Prominent signages were also designed to direct tourists to the kiosks. Taking into account feedback from CAG, IRAS also produced videos for screening to tourists at the airport, showing the step by step guide to obtain refund. IRAS also 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 publicising the new system to tourists.

c) Raising awareness of eTRS and minimizing confusion to tourists during transitional period
During the transitional period where both the electronic and paper system co-existed, we needed to minimise confusion to tourists. Moreover, with eTRS being new to tourists, some may have been apprehensive about using credit cards as a token for linking purchases at the retailers. Tourists who were not IT-savvy would require assistance when using the eTRS self-help kiosks at the airport.
To create 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 International 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 Global Blue, with IRAS maintaining control in project management.

Human resources
As this was an impactful project, the implementation efforts were led by the Deputy Commissioner (DC) for Goods and Services Tax Division (GSTD) with regular reporting to the Commissioner of IRAS. Staff from IRAS’ Information Technology (IT) division and business owner, GSTD were mobilised to form 3 working groups to look into the IT, business requirements and public communications aspects. Representatives from Finance & Administration, Law and Corporate Communications (CC) 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 DC.

GSTD provided and clarified business requirements with the vendor in the development of the system. The testing of the system was also performed by staff from GSTD with support from the IT Division to ensure full functionality. Staff from Customer Service and CC 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 CRA / IR 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 as well 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. Global Blue who owns the intellectual property for the original electronic system will be promoting this system to tax administrations in other countries.

Comments from participating retailers highlight the ease and convenience of the eTRS:

“With eTRS, customers do not need to complete their particulars at our counters anymore, enjoy shorter waiting time at the airport terminal as they only need to scan their eTRS tickets and save time on the GST claiming process at the airport. Retailers also benefit by saving time on helping customers to complete their particulars and this shortens the serving time needed for each customer.”
Ms Sherri Lim, Vice-President for Human Resource and TANGS Store Operations

“Being one of the first retailers to implement the new eTRS in May 2011 was an exciting experience and the programme has delivered on what we were hoping for. Uploading information is fast and so far the process has always been successful. It’s a great improvement to the previous system where we often had to input information several times.”
Ms Patricia Tan, Administration Manager, Administration & Operations, Harvey Norman

“Our first shop has implemented eTRS in July and we can see that our staff spend much less time issuing and printing tax forms and receipts which results in shorter waiting time for our customers. Overall, this new solution has proven to be simple and easy to use for all and we’re hoping that many more customers will benefit from this hassle-free electronic tax refund system.”
Ms Jenny Chua, Operations Manager, Capitol Optical Co. Pte Ltd

Lessons Learned

 What are the impact of your initiative and the lessons learned?
Since its implementation in May 2011 at Changi International and Seletar Airports, eTRS has successfully approved close to 2 million GST refund claims. Tourist arrivals for 2011 reached a record high of 13.2 million, a 13% increase from 2010. In total, $178 million was given in GST refunds for about $ 2.5 billion worth of tourist purchases of goods.
Numerous positive feedback and accolades were received, testament to IRAS’ continual commitment to providing greater convenience and service to the community.

“Implementing the new Electronic Tourist Refund Scheme was a win-win situation for us as retailers as well as for our overseas customers. Handling tax refund has become more efficient and allows our staff to fully focus on serving our customers, resulting in a happier shopping experience for them.”
Ms Josephine Teo, Merchandising Director, Flower Diamond

eTRS has achieved recognition, both locally and on an international arena, winning multiple prestigious awards, which helps affirm the success of this project. The awards are:

• CIO Asia Award 2012
The CIO Award is presented to the five most outstanding companies in CIO Asia’s list of top 100 Asian companies. The award recognised IRAS for being a role model for the IT community through effective use of ICT to generate a competitive advantage.

• Best Public Service (PS) 21 Project Award (Gold) in the 2012 PS21 ExCEL Awards
The Awards recognise outstanding individuals and teams in the Singapore Public Service who have made a significant impact in their work through their suggestions and innovations. The Awards undergo a rigorous evaluation process to ensure that winning projects have made the quantum-leap in innovation and demonstrated an outreach across agencies and a close partnership with the public. IRAS garnered the Gold Award, which was only awarded to the top 10% of all submissions.

• Ministry of Finance (MOF) Best Project Award (Gold)
The Award recognises outstanding innovative projects in the various agencies under MOF.
• IRAS Chairman’s Award
The Chairman’s Award is the pinnacle of all Innovation Awards and is given to outstanding projects with high cost savings and which have contributed significantly to achieving IRAS

Contact Information

Institution Name:   Inland Revenue Authority of Singapore
Institution Type:   Government Agency  
Contact Person:   Ernest Lee
Title:   Director (Organisational Excellence)  
Telephone/ Fax:   6351-3037/6351-3050
Institution's / Project's Website:  
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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