Iras recovers $175 million in GST and penalties from Jan-Sept
This follows audits, investigations of over 2,000 cases in first 9 months of the year
The taxman recovered a total of $175 million in goods and services tax (GST) and penalties between January and last month, following audits and investigations of more than 2,000 GST-related cases.
The Inland Revenue Authority of Singapore (Iras) yesterday said it had picked companies and individuals for audit by using data analytics to identify those at risk of non-compliance and evasion.
In a press release, the national tax collection agency said 53 cases involved GST fraud and evasion, with 20 cases already heard in court. To date, 14 cases have seen convictions while six cases are still being heard in court, said Iras.
In the 2018 financial year (FY), which runs from April to March, Iras recovered $195.8 million in taxes and penalties from its audit of 3,145 GST-related cases, based on publicly available figures.
It recovered $219.5 million from auditing 2,858 GST-related cases in FY2017. And in FY2016, it recovered $168.8 million from its audit of 3,113 cases.
FY2018 saw $37.5 million in taxes and penalties recovered in 155 cases stemming from investigations that did not arise from audits but may have been sparked by a tip-off. It recovered $35.4 million from 243 cases in FY2017, and $20.9 million from 120 cases the year before.
"Generally, non-compliance is more common among businesses with substantial cash transactions, weak internal controls or processes, and no or poor record-keeping," said the tax authority, adding that these practices are common among the self-employed and family-run businesses.
"Family members usually take on various business roles from sales to accounting. Some of these businesses which are handed from the founders to their successors tend to also pass down old, manual methods of accounting and record-keeping."
Iras highlighted the example of the funeral industry, which comprises more than 400 entities providing funeral-related services.
Funeral operators are particularly susceptible to tax offences, as they are largely cash-based and may not have proper record-keeping practices, Iras said.
FUNERAL PARLOURS RAIDED
The premises of three funeral operators here were raided simultaneously by Iras investigation officers last month. The operation on Sept 17 covered more than 10 locations across Singapore, with computers, mobile phones, SIM cards and business records seized.
The tax authority said 16 people are assisting Iras in investigations into their suspected involvement in tax evasion and failure to register their businesses for GST.
Iras launched a Web-based calculator on Oct 1 to let businesses more conveniently determine if they have to register for GST, by selecting their relevant sources of income and entering their income figures.
Those with taxable turnover exceeding the $1 million threshold are immediately directed to the myTax Portal, to submit their registration application.
The tax authority said it imposes lower penalties for those who promptly come forward with full disclosures of their mistakes uncovered in self-reviews.
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