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Why is Inland Revenue Authority of Singapore (IRAS) allowed to recover unpaid taxes/ MediShield Life premiums when I withdraw my CPF savings?
Taxes go towards funding of government expenditure; and to support the government's economic and social programme to ensure quality growth and an inclusive society. Most taxpayers pay their taxes on time. To encourage voluntary compliance where every taxpayer contributes their fair share of tax, there are penalties if taxes are not paid on time. Actions to recover the unpaid taxes may include appointment of agents such as CPF Board.
Under the law, IRAS is empowered to appoint CPF Board as an agent for the recovery of unpaid taxes/MediShield Life premiums. IRAS would have informed you that CPF Board has been appointed as agent to recover the unpaid taxes/MediShield Life premiums when you withdraw your CPF savings.
You may approach IRAS at 6356 7012 to discuss alternative arrangements to settle your unpaid taxes/MediShield Life premiums before submitting your withdrawal application.