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IRAS to step up audits and encourage GST compliance
 
Goods and Services Tax (GST) has been in effect in Singapore for about 20 years. Over the years, the Inland Revenue Authority of Singapore (IRAS) has encouraged the taxpayers to report their tax returns in a correct and timely manner.  In case of any errors initially, the option of Voluntary Disclosure Programme was available. 

Recently, the IRAS has announced that they plan to step up GST audits on large businesses for the next two years.  Large businesses constitute about 2% of the total GST population, yet, they contribute 50% of the GST payable. The IRAS has a risk-based approach to identify areas with a high risk of non-compliance and focus thereon.  Based on past audits, the IRAS has found that large businesses have transactions of a higher complexity and monetary value, increasing the risk of errors made.

The IRAS plans to check GST compliances of large businesses from different industries. Their scrutiny will also involve field visits to businesses.  Any discrepancies, such as GST errors or omissions identified through audit, will attract penalties of up to twice the amount of tax underpaid and a 5% late payment penalty.

The IRAS has taken a compliance initiative called Assisted Compliance Assurance Programme (ACAP) that helps businesses to set up a robust GST Control Framework as part of good corporate governance.  For exemption from audits, large companies are encouraged by the IRAS to undertake the ACAP.

In conclusion, the companies without robust processes to ensure timely and accurate compliance, companies that are not up to date with the changes in the GST regulations or companies that have complex transactions should ensure that a robust system and processes are in place to comply with the tax regulations.  It is recommended that companies review the tax views and positions adopted in the past.

 
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