SINGAPORE - One in 10 employers on the Auto-Inclusion Scheme (AIS), which allows employees to enjoy pre-filled tax returns, failed to file on time in 2023, despite repeated reminders.
The Inland Revenue Authority of Singapore (Iras) said on Feb 20 that more than 900 non-compliant employers were prosecuted in 2023, resulting in penalties exceeding $1 million.
Most of the employers that were fined were restaurants, foodcourts, coffee shops, general contractors, wholesale goods traders, retail traders, and beauty salons and spa services.
Their reasons for late submissions included changes in the person handling AIS and challenges in keeping up with administrative obligations, Iras said.
The authority reminded employers to submit their employees’ income information by March 1.
This applies to employers who are on AIS, or had five employees or more in 2023, Iras said. Non-compliance is an offence.
Employers who do not file on time may be fined up to $5,000, a sum that was increased in 2023 from $1,000 previously.
Key individuals in non-compliant businesses, such as company directors or partners, may also be fined up to $10,000, jailed for up to 12 months, or both.
In 2024, more than two million employees whose employers are on AIS will enjoy pre-filled tax returns or the No-Filing Service, so they do not need to key in their income information.
AIS streamlines the tax filing process for employees by automatically incorporating their income information in their tax returns, reducing the risk of under-reporting or unintentional errors, Iras said.
It added that employers must submit their employees’ income information on time to avoid inaccurate tax bills and delayed tax assessments due to missing data on pre-filled tax returns.
About 110,000 employers are expected to participate in AIS in 2024, the most since the programme was launched, said Iras.
Employers with fewer than five employees that are not on AIS and are interested in participating on a voluntary basis may do so in 2025’s filing by registering for the scheme via the myTax Portal between April 1 and Dec 31, 2024.
Employers can submit their employees’ employment income records via an eligible payroll software directly to Iras or online via the myTax Portal.
More details on filing seamlessly from software can be found at go.gov.sg/iras-sffs
Iras urged employers to submit complete and accurate employment income information for their employees.
It observed some common errors made by employers, including the under-reporting of gains from the exercise of stock options, the omission of taxable benefits such as gifts worth more than $200 and staff discounts worth more than $500 for goods and services.
Submitting inaccurate employee income information is an offence and may result in a penalty of up to two times the amount of tax undercharged.
Employers are encouraged to voluntarily disclose any past errors or omissions in their employees’ information immediately, for reduced penalties under Iras’ Voluntary Disclosure Programme.
Details on the programme can be found at go.gov.sg/iras-iitvdp
