S'pore government to refund S$7.5M to individuals & businesses that were wrongly charged GST fees

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Singapore government to refund S$7.5M to taxpayers incorrectly charged with GST fees

From March this year, the Singapore government will refund about S$7.5 million to taxpayers wrongly charged with Goods and Services Tax (GST).

On 14 Feb, the Ministry of Finance (MOF) shared that over the past five years, 18 fees across six agencies were erroneously charged with GST. These findings were revealed in an internal review, which concluded last month.

The agencies involved have immediately halted the charging of GST on the affected fees.

18 fees across 6 agencies involved in erroneous charges

In a press release published on Wednesday (14 Feb), MOF revealed that the 18 erroneously charged fees applied to both individuals and businesses.

Source: Ministry of Finance

The six agencies are:

Housing and Development Board (HDB)
Land Transport Authority (LTA)
Urban Redevelopment Authority (URA)
Singapore Food Agency (SFA)
Office of the Public Guardian (OPG)
Council for Estate Agencies (CEA)

The finance ministry pointed out that GST should be charged on services provided by government agencies, such as booking fees for public sports facilities.

However, GST should not apply to regulatory services.

Upon conducting their internal review, MOF found that the agencies initially considered the 18 fees to be processing fees. However, the fees turned out to be regulatory, hence explaining the incorrect charges.

For the past five years, the amount of incorrectly charged GST came up to approximately S$1.5 million annually.

Government will process refunds from March 2024

The six agencies, as well as the finance ministry, took the opportunity to apologise for the erroneous GST charging.

They’ve also stopped charging GST on the affected fees with effect from today (14 Feb).

From March, the agencies will contact the affected taxpayers and refund them the GST that they paid, with interest.

As GST-registered entities are required to store records for up to five years, the agencies will have the records of transactions since 1 Jan 2019.

For those who transacted before the aforementioned date, the agencies will be processing refunds based on “available records”. MOF mentioned that affected taxpayers can reach out to the agencies to request refunds if they’re not contacted by 30 June.

To prevent such incidents from reoccurring, MOF said it will be amending the GST Act to clarify the treatment of GST for such fees. Moreover, the ministry will stipulate a list of regulatory fees where GST should not be charged.

Also read: IRAS Warns Of Scam Claiming To Offer Tax Refunds, Do Not Provide Personal Information