By Melissa Tan
THE taxman has broken with convention and publicly named the sectors it is focusing its auditing on this year.
The Inland Revenue Authority of Singapore (Iras) usually keeps this information to itself but this year it hopes to encourage voluntary compliance with tax laws.
It changes its audit focus every two years, targeting a cross-section of industries and businesses. This year's audit is already underway and is expected to be completed by the end of next year.
The sectors that are under the microscope are wholesale electronics traders, small and medium-sized enterprise (SME) manufacturers, motor traders and marine fuel traders.
Statistics on the percentage of errant businesses in each sector are not kept but these four were chosen based on past experience and the sector-specific 'technicalities involved' in accounting for the goods and services tax (GST), said Mrs Chia-Tern Huey Min, the deputy commissioner of GST and property at Iras.
'For example, wholesalers have tended to be a bit careless' in the past, she said, noting that wholesalers sometimes 'don't have a proper way of identifying whether there should be GST on an invoice and so assume that there is'.
Singapore has more than 5,000 electronics wholesalers, and wholesale and retail made up 40 per cent of Iras' GST base in 2007.
SME manufacturers can mistakenly 'zero-rate' some goods and not pay GST on them, while motor traders tend to get confused over what tax rules apply to used cars.
Mrs Chia-Tern said it will be the first time that marine fuel traders will undergo an audit. Iras will check the compliance level of the 30 firms in the Approved Marine Fuel Trader scheme.
She added that Iras has reduced the penalty for companies that voluntarily disclose tax accounting errors. It will also conduct dialogue sessions and organise seminars and other educational programmes.
This article was first published in The Straits Times.