The latest version of a software tool for companies to prepare their financials in full XBRL (eXtensible Business Reporting Language) format was released today. This follows the announcement earlier this year by the Accounting and Corporate Regulatory Authority (ACRA) that come October 2013, Singapore incorporated companies (unless exempted*) will be required to file a full set of financial statements in XBRL based on revised filing requirements. ACRA has now set the effective date for companies to start filing in full XBRL as 22 October 2013.

* The exceptions to this requirement will be companies from certain specified industries, companies allowed to prepare financial statements using accounting standards other than SFRS (Singapore Financial Reporting Standards), SFRS for Small Entities and IFRS (International Financial Reporting Standards), and insolvent exempt private companies.

A record number of taxpayers are filing and paying their taxes on time, as revealed in IRAS’ Annual Report for Financial Year 2012/13 released today. Nine out of 10 individuals filed their 2012 tax returns on time, and nine out of 10 GST-registered businesses filed their GST returns on time throughout the year. Corporate taxpayers were also prompt, with eight out of 10 companies filing their 2012 tax returns by the due date.

Tax arrears dropped to a record low of 0.79% of the total net tax assessed. This contributed to the steady decline of total cumulative tax arrears - as at 31 Mar 2013, the total cumulative tax arrears stood at S$374 million, a significant reduction of S$109 million from the S$483 million of the previous Financial Year.

“Our ongoing efforts to promote a high level of voluntary compliance have resulted in more individuals and businesses filing their tax returns and paying taxes on time. On-time filing rates have improved across all tax types, while tax arrears declined to a record low of 0.79%, among the lowest in the world.”

Dr Tan Kim Siew
Commissioner of Inland Revenue

To make tax filing easier for individuals, the Auto-Inclusion Scheme (AIS) for Employment Income was extended to 36,000 employers in 2013’s tax filing season, up from 27,000 employers in 2012 (Figure 3A, Page 30 of Annual Report). The No-Filing Service (NFS) was further extended to 1.13 million taxpayers in 2013, up from 963,000 in 2012. This made this year’s tax filing period a non-event for the majority of taxpayers in Singapore (Figure 4A, Page 34 of Annual Report).

Simplifying Processes to Better Serve Businesses

To make it easier for small companies to report corporate income tax, IRAS introduced the simplified Form C-S in 2012. 63% (or 70,400 companies) of the small companies benefitted from this streamlined tax reporting process, cutting the average time taken to file their 2012 tax returns by half.

96% of Companies Benefiting from PIC are SMEs

Beyond raising voluntary tax compliance levels, IRAS played a key role in managing the Productivity and Innovation Credit (PIC) scheme since its introduction in 2010. In 2012, 44,000 companies or 37% of active companies benefited from the PIC scheme, up from 36,400 companies (33% of active companies) in 2011 (Figure 2A, Page 22 of Annual Report). 96% of the companies that claimed PIC in 2011 and 2012 were Small and Medium Enterprises (SMEs) with annual turnover of up to $100 million (Figure 2D, Page 24 of Annual Report).

In 2012, 62% of PIC claims were for the purchase or lease of automation equipment. 35% of PIC claims were for the training of employees while the remaining 3% of PIC claims were for other qualifying activities (Figure 2E, Page 25 of Annual Report).

Convenient, One-Stop Access to Tax Statistics

Highlights of FY2012/13 at a Glance 

• IRAS collected S$41.4 billion in tax revenue - a growth of 7.6% over the previous year. (Figure 1A, Page 18 of Annual Report)
• IRAS spent 0.79 cent to collect every dollar of tax.
• Tax arrears declined to a record low of 0.79%, among the lowest in the world.
• Total cumulative tax arrears was S$374 million, a significant reduction of S$109 million (22.5%) from S$483 million of the previous year. (Figure 3E, Page 32 of Annual Report)
• IRAS served more than 3.8 million taxpayers, comprising individuals, property owners and businesses.
• 94% of individuals filed their returns on time, up from 91.6% the previous year. (Figure 3B, Page 31 of Annual Report ) 
• 81% of companies filed their tax returns on time, same as the previous year. (Figure 3C, Page 31 of Annual Report)
• More than 93% of GST-registered businesses filed their tax returns on time throughout the year.  (Figure 3D, Page 32 of Annual Report)
• 99.7% of tax refunds were made within 14 days from the day the credit arose, which exceeded the target of 97.5%.
• We enhanced tax cooperation with 40 jurisdictions, up from 32 last FY, having incorporated the internationally agreed Standard for the exchange of information for tax purposes in Protocols/Avoidance of Double Taxation Agreements/Tax Information Exchange Agreement with them.

Inland Revenue Authority of Singapore

___________________________________________________
Note: IRAS’ Financial Year 2011/12 is from 1 April 2011 to 31 March 2012.

The above is a media release from IRAS taken from the following page 

ACRA held its annual flagship event – the Public Accountants Conference (PAC) on the 14th of August 2013. This year’s conference extends beyond auditing and focuses on how to improve the quality of financial reporting in companies. Over 800 delegates convene at the conference to discuss key challenges affecting the delivery of high quality financial reporting to investors and the rest of the business community. The theme for this year's conference is “Financial Reporting Value Chain - A Collective Responsibility”.

The event saw the release of two key reports, including a Survey of preparers of financial statements in companies in Singapore and ACRA’s Seventh Practice Monitoring Programme (PMP) Public Report. The survey of preparers of financial statements in companies in Singapore was conducted by ACCA and ACRA for the first time to examine the challenge of upholding the quality of financial reporting. The Seventh Practice Monitoring Programme (PMP) Public Report highlights the key findings of ACRA’s audit inspections on audit firms and other activities to promote audit quality.

Survey on Preparers of Financial Statements - Strengthening the Financial Reporting Value Chain in Singapore
The survey of preparers gauged preparers’ mindsets towards financial reporting, its challenges, and their preferred solutions to these challenges. Close to 400 accountants from large listed to small companies participated in the survey in May and June this year. Complementing the survey on financial preparers, a focus group of directors, preparers and auditors was held in June.

Key findings of the survey and focus group:

• Companies and preparers need to firmly take ownership over their financial statements. About 50% of the survey respondents appeared to believe that the primary responsibility over financial preparation fell on auditors rather than them. Adding to this were views from the focus group that some company officers are not fully engaged in financial reporting because they see it as a compliance exercise, and that many rely on their auditors to drive the process.
  
• Frequent changes and the increased complexity of Financial Reporting Standards (FRS) were posing a major challenge to some financial preparers.
  
• Survey respondents and focus group participants identified the following as top measures to raise the quality of financial reporting and to make it more relevant: employing and retaining qualified accountants in the finance function; continuous training for the finance team as well as for the board directors and management; funding for new technological support and professional assistance; and support from top management who recognise that external financial reporting is value-adding and not merely a compliance exercise.

Commenting on the results, Mr Kenneth Yap, Chief Executive of ACRA said:

“Quality financial information is the lifeblood of strong and vibrant markets. These survey findings underscore the pressing need to re-examine the responsibilities of each member of the financial reporting eco-system. Directors, audit committees, preparers and auditors must work with regulators to uphold investors’ trust and confidence in our market.”

Mr Chiew Chun Wee, Head of Policy, Asia Pacific, ACCA also said:

“The survey and focus group gave a clear message about the benefits of employing qualified accountants, and the need for companies to see the finance team not as a compliance team but as a communication team that bridges the gap between the company and its investors. For this bridge to have integrity and facilitate clear communication, companies need to give the finance team sufficient training, resources and authority to deal with today’s complex environment."

Seventh Annual PMP Public Report
This year’s report highlights progress made by some audit firms in the public interest entity (“PIE”) segment in establishing strong quality controls even in the midst of an increasingly challenging audit environment. The aim is to share leading practices that contribute to the execution of quality audits.

Audit areas that ACRA would like the audit firms in the PIE segment to focus on are the audits of cash flow forecasts and inventories. Of concern is that these deficiencies are still occurring even after having been identified in previous years. Public accountants should carefully re-examine and address the root causes of these findings.

The report also highlights how the workload of some firms in the non-PIE segment poses a major threat to audit quality. Excessive workloads can cause auditors to overlook issues or compromise on audit procedures. To break out of this mode, firms need to focus on delivering quality audits and charging fees commensurate with the value of their work.

Overcoming Challenges through Collaboration and Quality Assurance
Also at the conference, public accountants discussed how the profession can help companies to improve their accounting, and how audit firms can build a more sustainable professional practice. New tools was also released such as a toolkit “Getting Your Accounting Right” to help companies improve their accounting. The practical guide was developed by CPA Australia and the Singapore Management University’s School of Accountancy. The Financial Statements Review Committee of the Institute of Singapore Chartered Accountants also released a compilation of common financial report findings, for financial preparers and auditors to refer to.