Singapore to toughen penalties for GST act offences

It wants to broaden IRAS’ powers when cracking down serious GST-related crimes.

The Ministry of Finance (MOF) opened feedback to a set of proposals it has made for the amendment of Singapore’s Goods and Services Tax (GST) act before its introduction to imported services.

According to an announcement, the GST on imported services will take effect through a reverse charge mechanism for business-to-business (B2B) imported services, where the local GST-registered business customer must account and pay GST to the Inland Revenue Authority of Singapore (IRAS) directly, on the services that it imports.

The tax will also take effect through an Overseas Vendor Registration (OVR) mode for business-to-consumer (B2C) imported services.

There are five other proposed amendments to the existing tax policies. Firstly, MOF said that the bill should enhance IRAS’ ability to investigate tax crimes by including the powers of forced entry, arrest without warrant, and body searches.

The second amendment proposes that IRAS should be allowed to share with law enforcement agencies (LEA) information that it considers critical for investigation or prosecution of serious crimes. Serious crimes include offences covered by First and Second Schedules of the Corruption, Drug Trafficking, and Other Serious Crimes (Confiscation of Benefits) Act

The third amendment aims to reform the penalty for a non-GST registered person issuing an invoice or receipt with an amount purported to be GST. It proposes the use of alternative evidence, aside from invoices, to prove illegal tax collection; a custodial sentence where the offence is committed without reasonable excuse or through negligence; and a new offence for a GST-registered business that collects more tax than allowed.

MOF also proposed to extend customer accounting to government transactions. “This will help ease business compliance as GST-registered suppliers will not need to differentiate their transactions with the Government and with GST-registered customers,” it said.

Finally, it also proposed to allow the disposal of documents or things seized under the GST Act if the owner of the seized items fails to collect the items upon the end of the investigation.

Currently, the detailed consultation documents for the draft GST (Amendment) Bill 2018 can be accessed on the Ministry of Finance's website and the REACH consultation portal.