Fri, Sep 20, 2019 – 12:44 PM
ALTHOUGH Singapore ranks as one of the easiest places to do business in Asia, its accounting and tax sector stands to benefit from greater digitisation, according to a report released on Friday by administrative services firm TMF Group.
For one, the city-state has yet to make it compulsory to submit tax invoices electronically. This is in contrast to almost half (46 per cent) of Asia-Pacific markets and two-thirds of markets in North and South America which have made it a requirement, the report stated.
Electronic invoicing is often used as a tool to combat tax evasion. Although it is becoming more commonplace in Singapore, there is still a lack of legislation deeming it compulsory, which means a significant number of companies still process their invoices manually, said the report.
TMFs Global Business Complexity Index (Accounting & Tax) report analyses key accounting and tax practices across 76 jurisdictions worldwide, to determine the level of complexity faced by multinational businesses as they look to understand and operate in other countries. It is the first in a new series of three studies, developed based on statistically weighted data and qualitative research by local market experts.
Singapore outshone its regional peers in terms of adhering to international accounting standards, a trend seen in only 21 per cent of markets in Asia-Pacific.
According to the report, the Republics transition from local to International Financial Reporting Standards (IFRS), also known as Singapore Financial Reporting Standards (SFRS), highlights this trend of increasing convergence in industry standards in order to cut financial reporting costs for entities reporting in multiple jurisdictions and foster stability in Singapores financial system.
Singapore also imposes hefty fines for non-compliance to accounting and tax standards. It is among the 83 per cent of global markets to do so. These penalties deter corruption and have helped promote a trusted business environment for international investment in Singapore, TMF said.
However, the city-state could do more in terms of digitisation. Aside from electronic tax invoicing, adopting new technologies such as artificial intelligence (AI), blockchain and cloud computing will enable faster and more accurate processing of reports, TMF suggested.