All Goods and Services Tax (GST) returns will have to be filed online by September 2008, but the deadline for large firms is even sooner.

From next January, companies with annual turnover above $5 million will have to ditch paper forms and file on their computers.

There are about 64, 000 traders registered for goods and services tax but only one in four, about 17, 000 file electronically, said Inland Revenue Authority Of Singapore.

The rest still favour the paper method, even though e-filing on the IRAS site has been available since December 2004.

Yet traders have still dragged their feet, for a variety of reasons.

Some say that when IRAS send paper returns, it serve as a reminder”. Others claim they do not know how to e-file; a few have told IRAS that they do not have computers while the more stubborn hold-outs say they will wait until becomes compulsory.

One trader said that with the paper version, “it’s easier to change if you have made a mistake. It’s easier for the boss to look at the paper return and spot mistakes”.

The taxman also say that many traders still submit their forms on the last possible day.

The slow take-up has forced the IRAS to impose the deadlines in an attempt to boost e-filing.

These large firms, with turnover exceeding $5million, have been particularly slow to move. It is estimated that only about 4, 500 file online at present, leaving about 7, 000 yet to make the break from paper.

Surprisingly, it is smaller businesses, those with less than $2 million turnover, who comprise the majority – 52 per cent – of the e-filers.

This is possibly because many are already familiar with e-filing income tax.

All businesses with annual turnover above $1 million must register as GST trader and usually file returns every quarter.

The advantage of e-filing for traders is “faster refunds” – by as much as up to four days, said the taxman.

Another perk of e-filing is reduced mistakes as the system automatically adds up figures. Many businesses still submit paper returns with incorrect totals.

Another benefit is convenience for the company, especially if the boss – who authorises the form – is traveling. The boss can approve it online from overseas rather than waiting until he gets back.

There is a benefit for IRAS as well – e-filing frees staff time previously spent entering data from the GST returns into the system.

Iras said it has encouraged and offered help to traders to e-file over the past two years, including holding workshops.

“However, as a large proportion of them still have not done so, we have to move towards this phased compulsory e-filing approach, “ It added.

The first crunch period comes early next year when large firms will have to bite the bullet and e-file returns between January and March.

Iras said it will then assess the situation to see how to phase in the remaining smaller companies but it will give at lease six months’ notice to those affected.

Ms Jean Yip from Jean Yip Singapore said: “Previously I had to incurred costs in getting a courier service to deliver the return to Revenue House. With e-filing, they are received on time.”

Iras is providing a range of assistance, such as helplines and free e-filing workshops.

Penalties for failing to submit a return are $200 for each month a return in not submitted, up to $10, 000.

The government collected a net amount of $3.47billion from GST for the year ended 31 March last year. This levy generates the most revenue after income tax.

Extracted from "The Straits Times" Monday 04 September 2006

Updated December 2006