An upcoming Bill to allow the taxman to investigate serious crimes will be tweaked to clarify how these powers can be used, following a recent public consultation.
The earlier version of the draft Goods and Services Tax (Amendment) Bill included allowing Inland Revenue Authority of Singapore (Iras) officers to forcibly enter premises and conduct body searches. They also would have been able to arrest people suspected of having committed serious tax crimes without a warrant.
Now, the proposed changes to the Goods and Services Tax (GST) Act will state that such arrest powers will only apply to people with no reasonable excuse to resist officers from taking any document or items for investigation purposes.
The Ministry of Finance (MOF) said yesterday: "We note that individuals may, in limited circumstances, have valid reasons to refuse handing over documents or items to Iras officers for investigation." This might occur, for example, when the data requested by the Iras is subject to legal privilege.
The taxman will also provide more information about the other powers on body searches and entering premises if the amendments are passed in Parliament.
The MOF said: "The proposed powers are to be exercised only when necessary, such as to secure evidence for the investigation of tax crimes. In addition, these powers can only be exercised by designated tax investigators who have received training."
It added that the Iras will have clear guidelines and operational protocols on when these powers can be used. These will be taught to investigators, similar to the process at other law enforcement agencies.
The two changes are in response to the MOF's public consultation exercise with individuals and organisations in June. There were 70 suggestions with 47 accepted. The Ministry rejected several suggestions relating to the GST on imported services that kicks in on Jan 1, 2020.
The draft Bill seeks to impose an Overseas Vendor Registration (OVR) regime on business-to-consumer imported services, such as video streaming, apps, listing fees on electronic marketplaces, software and online subscription fees.
A reverse charge system will be used for business-to-business imported services like marketing, IT and management services.
Some respondents wanted more flexibility for overseas GST-registered suppliers under the OVR regime on how to determine a customer's status, such as whether he resides in or outside Singapore.
The MOF did not concur, stating that the approach in the draft Bill will need these suppliers to obtain payment, residence and access details, a process consistent with how other countries run OVR systems.
This is done through the credit card used, the billing address submitted by the customer and his Internet protocol address.
"The proposed approach is unlikely to impose significant compliance cost on businesses as the information prescribed is typically already gathered by the supplier in the normal course of business," said the MOF.
Some people also wanted a similar concession for the reverse charge regime, to determine if suppliers are subject to it through its GST-registration status in Singapore. The MOF said the GST-registration status may not accurately reflect whether services are imported from overseas.
The Bill is slated to be introduced in Parliament next month.