SINGAPORE — The Singapore government will refund certain government fees paid to six government agencies from March to individual and corporate taxpayers who were wrongly charged Goods and Services Tax (GST), the Ministry of Finance (MOF) said. was announced on Wednesday, February 14th. ).
The six agencies are the Council of Estate Agents (CEA), Housing and Development Board (HDB), Land Transport Authority (LTA), Public Guardianship Authority, Singapore Food Authority (SFA), and Urban Redevelopment. Authority (URA).
The Treasury said during an internal review of the GST treatment of government fees and charges conducted in November 2023, it found “inconsistencies in the application of GST” for 18 government fees across six government agencies.
While GST is typically charged on services provided by government agencies, such as rental fees for hawker stalls and exhibition space, the Treasury has said that the tax should not be charged on services that are regulatory in nature. acknowledged. The six agencies initially considered the 18 fees to be processing fees, but an internal review determined they were not.
The Ministry of Finance estimates that the amount of GST incorrectly charged to individuals and non-GST-registered entities who cannot claim input tax amount is approximately S$1.5 million annually. It added that the majority of transactions include GST of less than S$5 per transaction.
GST refund procedure
In an announcement, the Treasury Department and six government agencies apologized for the incorrect GST charges and then directed all agencies to take immediate steps to stop charging GST on the affected charges starting Wednesday. did. The ministry also said it would make the refund process “as seamless as possible.”
The ministry announced that government agencies will contact affected taxpayers and refund the GST paid with interest based on available records. All GST-registered entities are required by law to keep records for a maximum of five years, so GST agencies will keep records of taxpayers with whom they have done business in the past five years.
The Treasury Department said that beyond the five-year period, the agency will “aggressively issue refunds where records are available.” However, affected taxpayers who have not heard from a government agency by June 30, 2024 are encouraged to contact the relevant agency to request a refund.
Ministry of Finance to revise GST law
Currently, government agencies evaluate and decide whether to charge GST on fees based on broad principles and guidelines set out by the Treasury Department. Given that there are more than 5,000 government fees and levies, MOF said this approach could lead to mistakes by government agencies, such as incorrectly charging GST or missing the application of GST. Ta.
The Treasury will now amend the GST Act to clarify the GST treatment of such fees and include a list of regulatory fees that should not be charged with GST to “minimize the risk of such errors in the future”. He stated that he would stipulate the following.
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