Chartered accountant Wee Kong Eng shares more about the importance of compliance and offers insights into navigating the regulatory framework.
Singapore's Regulatory Landscape
Singapore's regulatory framework prioritises fostering a business-friendly environment. Numerous guidelines are implemented to not only support businesses in achieving sustainable growth, but also protect consumers or the public. However, Singapore also offers various initiatives, such as strategic exemptions that smaller enterprises can leverage for efficiency and flexibility in regulatory compliance. For example, smaller companies do not have to have their financial statements audited for a year if they meet certain criteria. All required submissions to the authorities are also digitised—Singapore's compliance system is probably one of the most efficient in the world.
Important Guidelines Businesses Must Pay Attention To
There is a long list of laws that businesses have to comply with. Firstly, they must prepare proper accounts and submit income tax returns. Those who are GST-registered (or required to pay GST) will need to submit GST returns. Secondly, all companies in Singapore must prepare financial statements, have the financial statements audited and hold an Annual General Meeting (AGM) unless they are exempt from doing so. Then, an Annual Return must be submitted to the Accounting and Corporate Regulatory Authority (ACRA). There are also other requirements like Central Provident Fund (CPF) contributions and submission of employees’ income to the Inland Revenue Authority of Singapore (IRAS).
Importance of Compliance
All businesses, regardless of their size, must ensure that they fully meet all statutory compliance guidelines as those are legal requirements and there are consequences for not complying with them. Large corporations usually give compliance requirements their due attention, but unfortunately, a good proportion of smaller, locally-owned businesses tend to neglect compliance and may have to suffer the effects of violations or non-compliance. This could stem from resource and cost constraints or a misconception that compliance with statutory requirements are not important.
However, in order to grow and expand, there must be changes to mindset and approach to compliance. And a culture of compliance, combined with a set of proper systems can be helpful for businesses looking for long-term sustainable success. For example, when they wish to sell their business, add new investors or when they exceed the threshold to be exempt from audits, difficulties will begin to rise if the business did not have the foundations for compliance in place.
Tips for Ensuring Compliance
It’s important for businesses, especially smaller entities that aim to grow, to have the right culture and attitude toward compliance. The tone from the top is crucial. Businesses should recognise that compliance with accounting, taxation, GST and other requirements is part of their business requirements. Like any other business costs, there must be costs allocated to meet these compliance needs, and these must be implemented from the get-go so that it becomes part of the business’s DNA. Many businesses grow without the required foundations for compliance in place and only to find that implementing the required policies, procedures and controls cannot be done overnight.
For businesses that are unable to perform all compliance activities themselves to meet these requirements, they can outsource the tasks to appropriately qualified service providers. However, when selecting a service provider or advisor, businesses need to make sure that they’re choosing those with the right expertise and capabilities to deliver the quality required. Many accounting-related services in Singapore are actually unregulated and there are a myriad of different types of service providers in the industry, so it’s wise to stay vigilant.
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About K E Wee & Associates PAC
K E Wee & Associates PAC (Public Accounting Corporation) is a professional firm of Chartered Accountants of Singapore that provides auditing, assurance, and other accounting services to businesses in Singapore. The team works to assist clients in meeting their compliance requirements, including corporate regulatory, financial reporting, goods and services tax, and company income tax submission guidelines.
Wee Kong Eng is a chartered accountant with over 20 years of experience and a Public Accountant registered with the Accounting and Corporate Regulatory Authority (ACRA). Throughout his career, he has assisted clients in various aspects, including navigating tax, GST, and transfer pricing audits conducted by IRAS, facilitating tax refunds, and guiding businesses through complex compliance issues.
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