A local promoter of shows and entertainment company was found guilty of under-declaring GST output tax of more than $500,000 recently.
It was stated in the case that the company failed to check the accuracy of the GST Returns filed to IRAS made by its accounting and tax agent.
This case highlights the important point that companies NOT their agents are responsible to ensure the accuracy and timeliness of returns made to IRAS. In order to do so, they should be able to verify the accuracy and reasonableness of the numbers before signing off and submitting the returns to IRAS.
Accounting and tax agents’ duties are to assist companies to prepare and compile the accounts and tax filings, based on the information and details provided to them. What does this mean to companies? Companies need to make sure all business transactions are properly documented with accurate supporting documents. They can no longer give reasons like no receipts, it’s normal in the industry, etc.
Also, companies should be careful in choosing accounting and tax agents. There are many unqualified agents out there who will offer you their services at a very unrealistic low fee. Because of this, some business owners have the mistaken idea that qualified and expert accounting and tax advice can be purchased cheaply!
Therefore, this case is a very good example of how companies can end up on the wrong side of the law if they do not take basic precautions as mentioned above.