[vc_row][vc_column][vc_custom_heading text=”IRAS Recovers $175 Million in Penalties for GST Non-Compliance” font_container=”tag:h1|font_size:36|text_align:left|line_height:1.3″ google_fonts=”font_family:Lato%3A100%2C100italic%2C300%2C300italic%2Cregular%2Citalic%2C700%2C700italic%2C900%2C900italic|font_style:700%20bold%20regular%3A700%3Anormal”]
Every business and individual that earns over $1 million per year is required to register for GST. The business\u2019 director should file accurate tax returns<\/a> every business yearly. Non-compliant businesses usually incur about $100,000 in GST recovery and penalties. About 100 non-compliant businesses are prosecuted every month, and this number is rising.[\/vc_column_text] [\/vc_column_text] On 17th September 2019, the IRAS launched a multi-pronged investigation into three funeral home companies in the country. The investigators confiscated the suspects\u2019 business records, phones, SIM cards, and computers. Investigators have narrowed their investigations to ten locations and 16 suspects who are currently helping with investigations.<\/p>\n One case, in particular, was successfully prosecuted over the past year. One funeral operator was accused of suppressing his trade income to keep it under the $1 million mark. The operator was charged and slapped with hefty fines. The business was also obliged to pay all GST taxes evaded since it first reached the $1 million mark. In a related case, a tax agent was charged and fined $80,000 for helping a client evade paying GST by doctoring financial records to stay below the $1 million annual income threshold.[\/vc_column_text] The IRAS has also acknowledged that it is difficult for some businesses to do the math. In response, it has designed a new calculator designed specifically for tax returns calculations. The calculator is easy to use and can run on a smart phone and on the web. Most notably, the calculator determines which sources of income are taxable. However, users are required to select the specific source of income and submit a correct figure. Finally, the calculator redirects directly to the Tax Portal to finalize the returns.<\/p>\n IRAS has also taken a softer stance on violators who disclose their violations voluntarily. They face lower penalties and a softer justice system. However, those businesses are still required to pay the full GST amount since the time their income first surpassed the $1 million mark. A fine of 10% of the GST amount may also be imposed.[\/vc_column_text] 1. Keep Accurate and Detailed Records<\/strong><\/p>\n ACRA, IRAS, and other regulatory authorities are very stern about businesses\u2019 financial records. This is why every business should keep detailed and accurate financial records of all their transactions. Besides, it is only prudent for a business to practice proper book-keeping<\/a>. Good book-keeping culture will help you know when you hit the threshold and determine exactly how much you should pay in taxes.<\/p>\n Fortunately, IRAS has developed a new calculator that makes it easier to get your accounting right. You can do your math using the specialized GST Registration Calculator to determine whether you are liable for taxation.<\/p>\n 2. Register as Soon as You Hit the $1 Million Threshold<\/strong><\/p>\n As long as you earn over $1 million per year and are not registered for GST, you deny the government revenue in taxes. This is why it is necessary to get registered as soon as you reach the threshold.<\/p>\n Remember, if you fail to pay GST taxes, you will not only be penalized but also forced to pay the overdue taxes all at once. This can be financially destabilizing.<\/p>\n 3. Hire an Accountant<\/strong><\/p>\n It is understandable that not all businesses can afford the services of a professional accountant. However, you can still avoid mishaps by at least getting an accountant to verify your books. You will need to keep proper records that the accountant can use when verifying your books. At the end of the day, the cost of a temporary accountant is much lower than the costs incurred in fines and penalties.<\/p>\n Mr Lawrence Eng has personally called for taxpayers to comply with the law and help authorities combat willful fraud. He also promised severe penalties for any violations of the law.[\/vc_column_text][vc_column_text]<\/p>\n\n