From January 2019 to September 2019, more than 2,000 GST related cases are being investigated for GST non-compliance issues. Within this period, IRAS has since recovered $175 million in GST and penalties. As of now, 14 cases has been convicted for GST frauds and evasion. Another 6 cases of similar offences are also pending for conviction.
IRAS has identify that most businesses are prone to GST related offences are:
- Family run businesses, usually sole proprietorship
- Weak accounting process and control
- Most business transaction are in Cash
In order to identity Company with higher risk of committing the offence, IRAS has developed data analytics capabilities to detect Non-compliance Company. The system uses advanced statistical techniques to filter through its source of information.
Business that is run by family members tends to lapse in their internal control and record keeping. Most of the business transactions are often recorded manually by way of hand written and usually they do not have any supporting documents.
One such example is the funeral industry, which most of the transaction are in cash and are run by family members. On 17 September 2019, IRAS conducted raids on 3 funeral operators in Singapore. The operations covered more than 10 premises and have seized digital items such as computers, mobile phones, sim cards and business records to assist in the investigations. 16 individuals are call to assist in the investigation regarding their involvement on tax evasion and failure to register GST.
Business with no proper bookkeeping process may fail to file their income tax accurately and also fail to register GST when the revenue has already exceeded $1 million.
IRAS often conducts audits to identify businesses that fail to register for GST. On average ever year, IRAS uncovers more than 100 businesses that fail to register for GST. And, each of these businesses has to pay about $100,000 in GST and penalties to IRAS as a result.
Mr Lawrence Eng, Assistant Commissioner of IRAS’ Investigation and Forensic Division, said, “Members of the public who have useful information to offer that can help us fight tax crimes are encouraged to step forward. IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who fail to register for GST and willfully evade tax. IRAS would like to invite businesses, especially family-owned ones, to do a self-review of their past records and voluntarily disclose any errors made. IRAS will treat such disclosures as mitigating factors when considering the action to be taken.”
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