Singapore’s Ministry of Finance has put forward a proposal to implement a surcharge for tax avoidance, part of the draft Income Tax (Amendment) Bill 2020.
This would introduce a 50% fine for those who avoid paying tax, which would take effect when the Comptroller of Income Tax (CIT) imposes a tax liability on a person under the proposed section 33, or when it recalculates any gains, profit, loss, capital allowance or deductions for donations made by an individual.
According to global law firm Withers, if the draft amendment bill passes, the measure will come into force from the 2023 tax year.
No getting out
The penalty will be equal to half the tax sum imposed on the avoider, which will then be recovered by the CIT as a debt to the Singaporean government.
The draft sets out that the fine needs to be paid within a month from when the notice is issued to the taxpayer, regardless of whether the individual wishes to object or appeal.
A similar measure has been proposed for the stamp duty anti-avoidance provisions, as well.
The Ministry of Finance will close the consultation on the amendment on 7 August 2020, and the a summary of comments and feedback will be published by the end of September, Withers added.
