Iras recovers S$175m in GST, penalties in first 9 months of 2019

THE Inland Revenue Authority of Singapore (Iras) has recovered S$175 million in Goods and Services Tax (GST) and penalties during the first nine months of 2019, from audits and investigations of more than 2,000 GST-related cases, it said on Sunday.

Of these, 53 cases were investigated for GST fraud and evasion, of which 20 have been charged in court and 14 of those convicted.

Iras uses data analytics to detect non-compliance and evasion, sifting through data to identify high-risk cases.

Noting that non-compliance is more common among businesses with substantial cash transactions, weak internal controls or processes, and absent or poor record-keeping, Iras said these traits are common among self-employed or sole proprietors, and family-run businesses.

Iras also advised firms to be prudent and register early for GST. Each year, the agency typically uncovers about 100 businesses that fail to register for GST, with each having to pay an average of S$100,000 in GST and penalties to Iras as a result.

All businesses, including individuals deriving income from their trade, profession or vocation must register for GST if their annual taxable turnover exceeds S$1 million.

However, some businesses suppress their turnover to stay below this threshold. Businesses with inadequate record-keeping and accounting practices may also fail to report sales and/or expenses accurately in their income tax returns, and fail to register for GST when they cross the threshold.

To help businesses with compliance, Iras published a web-based and mobile-compatible calculator on Oct 1. Businesses can use this to determine if they need to register for GST, by entering their income figures into the calculator. The calculator determines which sources of income are to be included as taxable turnover, and users who exceed the S$1 million threshold will be directed to myTax Portal to submit their registration application.