Goods and Services Tax (GST) is an indirect tax that is levied on the supply of goods and services in Singapore. Every business that makes taxable supplies with a turnover exceeding SGD 1 million per year must register for GST. Complying with GST regulations can be challenging, especially for small businesses. In this article, we will discuss why engaging professional consultants for GST compliance is beneficial for businesses in Singapore.
The Challenges of GST Compliance Complying with GST regulations involves many challenges such as understanding the complex rules and regulations surrounding GST, ensuring accurate record-keeping, submitting timely returns, and managing audits. Non-compliance with these regulations can result in significant penalties and fines that can impact a business’s bottom line. According to a survey conducted by the Inland Revenue Authority of Singapore (IRAS), 63% of businesses find it challenging to comply with tax obligations.
Why Engage Professional Consultants for GST Compliance?
Outsourcing your business’s tax compliance needs to professional consultants offers several benefits:
Expertise and Knowledge: Professional consultants have specialized expertise and experience dealing with complex tax laws and regulations. They are up-to-date on the latest changes in the tax code, which means they can help businesses navigate any new or changing requirements.
Time-Saving: Engaging a professional consultant frees up valuable time and resources that businesses can use to focus on other important aspects of their operations. It also eliminates the need for employees to spend time learning about new tax laws or completing paperwork related to taxes.
Cost-Effective: Although outsourcing may seem expensive at first glance, it can save businesses money in the long run by avoiding costly mistakes or penalties resulting from non-compliance. The cost of hiring a consultant may be less than what you would pay if your business were penalized for non-compliance.
Maximizing Tax Savings with Professional Consultants Professional consultants not only ensure compliance but also help businesses identify opportunities to maximize their tax savings. They may employ strategies such as restructuring business operations or identifying expenses that qualify for deductions or exemptions. By doing so, they help businesses minimize their tax liability while remaining fully compliant with all relevant regulations.
Avoiding Penalties and Fines Non-compliance with GST regulations carries significant penalties and fines that can hurt a business’s bottom line. According to IRAS statistics, there were 1,901 cases of wrong filing between April 2019 – March 2020 alone which resulted in $7.92 million worth of fines being imposed on errant taxpayers.
In addition,
- Late payment penalty is charged at 5% per annum based on amount outstanding
- Non-payment penalty is charged at 1% per month based on amount outstanding
Conclusion Engaging professional consultants for GST compliance helps businesses stay compliant while maximizing their tax savings opportunities. It saves valuable time and resources while minimizing risks associated with non-compliance such as penalties and fines. With the complexity of Singapore’s taxation system increasing over time, it has become even more critical for businesses to engage professionals who have specialized knowledge about local laws concerning taxation.