MUST my company start charging 7 per cent goods and services tax (GST) from exactly 12am on July 1?

Are there any allowances for small and medium-sized enterprises (SMEs) which have problems making the transition, especially for Giro or cheque payments?

In view of the administrative difficulties that you may face in making the transition to the new GST rate, the Inland Revenue Authority of Singapore (Iras) will be giving the following concessions for which you do not need to apply.

(a) Giro payment: You are allowed to treat all payments received through Giro within the month of July 2007 as payments received before July 1, 2007, and to charge GST at 5 per cent instead of 7 per cent if all the following conditions are met:

(i) The Giro deductions are successfully effected by the end of July 2007;

(ii) The Giro deductions relate to bills or tax invoices that have been issued before July 1; and

(iii) The bills or tax invoices in (ii) have been issued according to the normal billing cycle of the business.

(b) Cheque payments: Iras will treat all cheques successfully presented to the bank within two working days after July 1 as payments received before July 1 and allow GST to be charged at 5 per cent instead of 7 per cent.

(c) Sales made after midnight of the day before July 1, 2007: If you are operating past midnight on the day before July 1, Iras will allow you up to 7am on July 1 to continue charging GST on your sales at the old rate of 5 per cent.

The concession is granted only if it is your normal accounting practice to treat the sales after midnight as sales of the preceding day and your cash registers and accounting systems are already programmed in this way.

Please log on to the Iras website (www.iras.gov.sg ) for more information.

Must I contribute CPF for all my staff?

I run a small and growing business, and my staff numbers are rising rapidly.

Do I have to pay Central Provident Fund (CPF) for all my Singaporean employees? Are there any exceptions?

Yes, it is mandatory that you pay the employer's and employee's share of CPF contributions monthly for your local employees unless they are posted overseas.

There is currently an SME Rebate Scheme, which is a two-year assistance programme to help locally registered SMEs adjust to the rising business costs.

Eligible firms will receive cash rebates pegged to their total employer and employee CPF contributions made over two years between July 1, 2007 and June 30, 2009.

(a) First year (qualifying period: July 1, 2007 to June 30, 2008)

First $40,000 (First tier): 2 per cent of the total contribution or $800, whichever is lower

Next $40,000 (Second tier): 1 per cent of the total contribution or $400, whichever is lower

(b) Second year (qualifying period: July 1, 2008 to June 30 2009)

First $40,000 (First tier): 1 per cent of the total contribution or $400, whichever is lower

Next $40,000 (Second tier): 0.5 per cent of the total contribution or $200, whichever is lower

For more information, please contact the CPF Call Centre at 1800-227-1188.

This week's answers were provided by Iras and Spring Singapore.

For more information, go to www.business.gov.sg

E-mail questions to ericatay@sph.com.sg