WHO IS AFFECTED AND HOW REFUNDS WILL BE MADE
The fees collected by the six agencies apply to both individuals and businesses. GST-registered entities are not affected as they would have been able to claim the charges as input tax previously.
Only individuals and non-GST registered entities that cannot claim input tax are eligible for the refunds.
MOF said the amount of wrongly charged GST for this group is estimated at S$1.5 million per year, with the vast majority of transactions involving GST of S$5 or less for each transaction.
The government said it will refund the erroneously charged GST with interest, and pledged to make the refund process “as seamless as possible”.
The six agencies will contact affected taxpayers from March based on “available records” since Jan 1, 2019.
“All GST-registered entities are required by law to keep records for up to five years. The agencies will therefore have a record of the taxpayers who transacted within the last five years,” MOF said.
This means that the amount of wrongly charged GST is estimated at S$7.5 million over the past five years.
Beyond the five-year period, agencies “will make proactive refunds where records are available”. MOF said affected taxpayers who are not contacted by Jun 30 can contact the agencies to seek a refund.
To prevent such errors in the future, the government intends to make legislative amendments to the GST Act to “prescribe a list of regulatory fees where GST should not be charged”.
“The government is committed to upholding high standards of governance and integrity. We continually review our processes and systems, and tighten them where necessary,” MOF said.
“Where errors are discovered, we take immediate action to rectify them.”