Review and filing of quarterly GST return
In its latest annual report for the financial year ended 31 March 2025, the Inland Revenue Authority of Singapore (IRAS) shared some telling numbers. On average, IRAS recovered $71,700 per GST audit, compared to $53,900 per corporate tax audit and $23,900 per individual tax audit.
At first glance, this might seem surprising. After all, corporate tax computations are complex — involving detailed adjustments, tax incentives, and deferred tax considerations — while GST returns appear straightforward: just output tax minus input tax.
But the amount of tax and penalty recovered from the IRAS audit tells a very different story.
1. The Compliance Paradox: Simpler Forms, Larger Recoveries
GST is often seen as a simple compliance process — a monthly or quarterly filing based on accounting records. Due to the shorter filing deadline of one month after the end of the prescribed accounting period, GST returns are mostly prepared and reviewed in-house.
By contrast, corporate income tax is filed once a year, after months of review and with input from professional tax advisors. That difference in process alone explains part of the recovery gap.
2. Why GST Audits Yield the Highest Recoveries
There are several reasons why GST audits consistently result in higher recoveries:
- Transactional volume and frequency: GST is charged on the gross amount (i.e. every sale, purchases and imports affects GST reporting) whilst corporate tax is charged on the net amount (i.e. profit of the company).
- Complexity of the GST rules: Whether it’s the treatment of international services, disallowed input tax, partial exemption, or imports suspension scheme, each carries technical nuances that are easy to overlook.
- Operational ownership: GST compliance is typically handled by finance teams focused on day-to-day transactions rather than tax specialists.
The result is a perfect storm — a process that appears simple, managed by non-specialists, but governed by rules that are anything but simple.
3. The Outsourcing Gap: Who Files What Matters
Another key observation is who prepares the returns. Corporate tax filings are commonly outsourced to professional tax agents or accounting firms, ensuring the return benefits from a review by someone trained in tax legislation and IRAS practice.
GST returns, on the other hand, are almost always prepared in-house. The finance team keys in data, reconciles accounts, and submits the return — often without an independent check. While this may save costs, it also removes an important layer of risk control.
As a result, errors often go unnoticed in GST filings until IRAS conducts an audit.
4. The Declaration Difference: A Subtle But Crucial Signal
When companies file their corporate income tax return (Form C or C-S), they are required to indicate whether the return has been reviewed by an Accredited Tax Advisor or Practitioner. This simple question functions as a soft compliance control — it encourages businesses to seek professional review and reinforces accountability.
In contrast, no such declaration exists in the GST return filing process. The absence of this question can create a misleading impression — that GST compliance is simpler or less risky. In reality, it’s not.
Just because IRAS does not require professional review does not mean GST returns are easier. It simply means that the responsibility for accuracy lies entirely with the business. Unfortunately, this often results in GST being treated as routine bookkeeping rather than a strategic compliance function.
Some little birds told me that the same declaration may be introduced for GST return in the near future.
5. What the Numbers Really Mean
The $71,700 average recovery per GST audit is not merely a statistic — it’s a message. It signals that many businesses underestimate the technical depth and control required in GST compliance.
Corporate tax filings undergo professional review and when there are new businesses, the board may sometimes ask “How about the tax impact?” and by tax, the board often refer to corporate income tax rather than GST.
GST filings, in contrast, are typically seen as administrative work handled by junior staff and it can be filed simply based on the reports generated from the accounting system.
The irony is that GST is the only tax that touches every business transaction — from purchase to sale, from import to export. There is also a requirement to pay output GST to the IRAS when the company give away something for free! The sheer volume and variety of transactions mean that errors multiply faster than most realise.
And yet, unlike corporate tax, there is no structured mechanism requiring a review by an accredited person.
6. Strengthening GST Governance: Practical Steps
Businesses can close this gap by applying the following to GST compliance:
- Conduct periodic GST health checks or ASK reviews before an IRAS audit occurs.
- Train finance teams to recognise GST-sensitive transactions and red flags.
- Engage external GST specialists for periodic reviews, even if the GST return is prepared by the in-house finance team.
- Implement system-based controls to detect anomalies in tax codes or supplier input tax claims.
These steps not only mitigate audit risk but also demonstrate to IRAS a strong compliance culture — a factor that can influence how future audits are conducted.
7. Conclusion: Rethinking GST Risk
The higher tax and penalty recoveries from GST audits do not mean IRAS is stricter with GST than with other taxes. They simply reflect where compliance processes are weakest.
While corporate tax returns are reviewed and often externally validated, GST filings are typically submitted with little to no review. The lack of a review declaration in the GST return should not be interpreted as a signal that GST is simpler — it’s a reminder that the responsibility rests squarely on the business.
In today’s regulatory environment, businesses cannot afford to treat GST as a routine form-filling exercise. It deserves the same professional attention as corporate tax — if not more.
Because when the average audit recovery is $71,700, the message from IRAS is clear:
GST risk is real and prevention is far cheaper than correction. Get your GST return reviewed by an Accredited Tax Advisor (GST) now!
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