GST cheats, beware the taxman
Iras stepping up checks with more investigators on cases, as revenue from GST goes up
Published on Apr 27, 2014 8:24 AM
The tax authorities are stepping up checks on businesses to nab and deter Goods and Services Tax (GST) cheats.
GST is now the No. 2 revenue-earner for the Government after corporate income tax, and netted $9 billion in the financial year ending March 31 last year, up from $2.2 billion 10 years earlier.
Through regular audits alone, the Inland Revenue Authority of Singapore (Iras) has recovered an average of $110 million annually in the past five years from businesses that were ignorant of, or negligent in complying with GST rules.
Investigations of 130 suspicious cases over the past five years resulted in 20 people being prosecuted and 12 sent to jail. Iras also recovered $37.6 million from these cheats.
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2 AREAS OF NON-COMPLIANCE
The taxman is paying more attention to two areas this year when it comes to compliance with Goods and Services Tax (GST) rules.
One is the sale of non-residential properties. The second is the logistics industry, Inland Revenue Authority of Singapore (Iras) assistant commissioner of the GST division Sabina Cheong told The Sunday Times.
She explained that GST has to be charged for the sale of non-residential property, such as office or factory space. It has found cases when businesses did not charge the buyers GST when they sold their non-residential properties.
Or a business may have collected GST from the buyer but did not pass it on to Iras. As such transactions are usually of a high value, the amount of GST not paid can be substantial, she said.
As for the logistics industry, Ms Cheong noted that freight forwarders who provide logistics services such as the transportation and storage of goods may think that all their services can be zero-rated.
This is because goods and services to be exported are zero-rated, which means there is no GST charged.
But this may not be the case, as it depends on the nature of service provided,
Ms Cheong said.
Tax experts say that the focus on the sale of non-residential property could be due to the fact that the market for such property has become hot in recent years, with many transactions taking place.