GST charges have become part of our lives. For example, shopping and eating. GST has been implemented in Singapore since April 1994. If you have not realised, some stores require you to pay GST while some do not. Companies that do not require you to pay GST have a total turnover of less than a million dollars in a time span of 12 months. Companies that require you to pay for GST have a turnover of more than a million dollars in 12 months, or they just opt to voluntarily register. You may be wondering why companies choose to do that. Well, there are many benefits to GST registration and I will list them below.
One benefit that companies gain from registering for GST is that they will be able to receive help from the government. Let me explain it further. By registering for GST, you will be helping the government. How? It gives the government bigger data to analyze when making decisions, helping them to predict budget costs more accurately. This will not only provide them with more data but allow them to make changes in the law to help businesses. Companies that intend to operate in Singapore will gain the most benefits as it gives the government time and data to make these changes.
Registering for GST can also help create a presence for your company. As you know, big companies are required by law to register for GST. In such a competitive market, creating a presence for your company can be super challenging. However, by voluntarily registering your company for GST, you are letting others know that you have a presence in the market. It shows competitors and clients that you are serious and here for business. They will assume that your company generates a big revenue and thus provides products or services that satisfy customers.
Another reason to voluntarily register for GST would be that it has a lower cost of administration. According to Forbes magazine, Singapore’s GST is proven to be a very efficient tax system. This is proven to be appealing to investors from foreign countries as the cost of doing business is lower compared to other countries. This is due to the administration being low in cost. Customers are the one paying for tax and companies act as a channel for them. So companies are not required to fork out any money to pay for tax.
Other than benefits, there are other reasons why companies register for GST voluntarily. This happens when their suppliers or customers are mostly GST registered, if they want more presence in the market, or if they are trying to sell goods and services to overseas customers.
Some companies are scared of not being able to cope with the workload that comes with voluntarily registering for GST. There will be additional administrative workload as there are responsibilities that a GST registered company has to complete. Instead of stressing yourself out with the workload, you can search for companies that offer accounting services that specialise in this area.
If you own a company or are currently thinking of setting one up, make sure to do some research and consider all the factors when it comes to registering for GST. If you come to a conclusion to register, you are required to register with the Inland Revenue Authority of Singapore (IRAS). In case you do not know what IRAS is, they are the main tax administrators in Singapore. They collect about 70% of the government’s revenue.
It is not easy to decide whether or not you should voluntarily register your company for GST. It is an important business decision that must be made carefully. GST registration can benefit you and your company in the long run with proper planning. However, a lack of planning can result in wasting valuable resources.
Our team can help you with your GST registration, taxes needs and reporting obligations effectively. Visit our website to find out more: https://www.entrust.sg/services/taxation/