Singapore’s Central Provident Fund (CPF) Board is putting S-League clubs under investigation for failing to pay CPF taxes for their under-21 (U-21) soccer players. It is understood that the U-21 players are paid a maximum of only S$300 allowance, and most only receive S$100 to S$200 from the S-League clubs for meals and transport reimbursement.
A general manager of a S-League club who declined to be named told media reporters that they will comply with the demands of the CPF Board:
“The club was notified by the CPF Board in November and we duly paid up the shortfall in CPF contribution the following month. The club pays a training allowance of $100 to $200 to its Prime League players but we were unaware that we had to declare this to the CPF Board. However, the club respects the wishes of the Board and we will follow their policy from now on.”
A spokesperson of the S-League said that they were unaware “allowance” of such a small payment would warrant a CPF tax payment:
“The S-League understands that the clubs had in the past been under the perception that the ‘allowance’ paid to the Prime League players did not necessitate CPF contribution.”
CPF is a tax for all Singaporeans and permanent residents, at a hefty 37% of the total wage for those under the age of 55. The Singapore government refuse to acknowledge CPF as a tax, and instead calls it a “contribution”, splitting it 17% from the worker and 20% from the employer. Although the CPF tax is originally meant as a mandatory saving plan that returns all funds by the age 55 when it was first implemented, the Singapore government has full rights to change withdrawal age, withdrawal limit and interest rates, or even decide not to return the CPF. Foreigners do not have to pay CPF taxes.
Currently, the Withdrawal Age is 65, with plans to increase to 71. The Singapore government has also depressed interest rates to a default of 2.5%, effectively leaking CPF fund value to long-term inflation. Also created by the ruling party government is a yearly-adjusted Minimum Retirement Sum at S$161,000, and a compulsory CPF Life annuity and Medishield Life tax.
Passing CPF law changes is the ruling party government under Prime Minister Lee Hsien Loong, who is also investing the CPF funds from his second hat as the Chairman of Singapore’s one of two sovereign wealth fund companies, GIC. Prime Minister Lee’s wife, Ho Ching, also manages the CPF funds as CEO of the other sovereign wealth fund company Temasek Holdings.