Singapore IRAS GST Audit Findings: Key 2024-25 Insights

The Singapore Inland Revenue Authority, also known as IRAS, has published the report on the results of the GST audits for the fiscal year 2024-2025, which were conducted across various industries and sectors. The report also includes valuable recommendations and advice for businesses on how to remain GST compliant and avoid costly mistakes. 

Main GST Audits and Investigation Results

Throughout FY 2024/25, the IRAS conducted more than 2,800 GST audits, resulting in the recovery of SGD 205 million (approximately USD 160 million), including penalties. As reported, businesses of all sizes were part of audits, where it is outlined that businesses, regardless of size and structure, are at a greater risk of GST errors and penalties if they lack proper oversight of their GST compliance. Meanwhile, those with strong governance can avoid costly mistakes.

Therefore, IRAS stated that good compliance relies on having staff with solid GST knowledge, effective record-keeping, robust internal controls and systems, and regular reviews. As part of the compliance process, businesses that notice they have breached GST rules and regulations may report these breaches under the voluntary disclosure scheme.

Voluntary disclosures attract no penalty or reduced penalties compared to errors found by IRAS. Additionally, as part of the program to combat GST fraud and non-compliance, IRAS announced the reward system for those who report GST malpractice. Under the program, individuals can report suspected GST malpractice through a dedicated form, with the possibility of receiving a reward worth 15% of the recovered tax, up to a maximum of SGD 100,000, if their information leads to successful GST recovery.

Some of the highlighted cases from the report include a case of a business repeatedly failing to display GST-inclusive prices, which resulted in a SGD 5,000 penalty. Another example is a company's involvement in a missing trader fraud arrangement, which resulted in the disallowance of its input tax claims and the nullification of zero-rated supplies, leading to a repayment of SGD 10 million of previously claimed input tax and penalties.

Conclusion

Reports like the one released by the IRAS demonstrate the challenges of ensuring accurate GST payments and the importance of conducting GST audits. On the other hand, the report also highlights how businesses sometimes unknowingly break GST rules and regulations, and emphasizes the importance of having a general understanding of GST legislation, as well as knowing when to contact or hire a professional to ensure compliance.

Source: IRAS - Recent GST Audits, VATabout