Singapore’s Proposed Approach to Tackling Missing Trader Fraud

Abstract

In the Draft Goods and Services Tax (Amendment) Bill 2020 (the “Draft Bill”), Singapore proposes a new framework to deal with the problem of MTF. The approach is neatly summarized by a document released by the Singapore Ministry of Finance: “Annex: Proposed Changes to the Goods and Services Tax Act”, of which one point is of particular interest. The document states that the proposed legislative amendments will “allow the Comptroller of GST to deny a GST-registered business’ input GST claim, if the business knew or should have known that his purchase was part of or connected with a fraudulent arrangement. The burden of proving that the business knew or should have known of the fraudulent arrangement lies on the Comptroller, with the standard of proof being the balance of probabilities. This is similar to the approach taken in the United Kingdom (“UK”) and the European Union to safeguard tax revenue.”

Keywords: Carousel Fraud, VAT, GST, Missing Trader Fraud, Singapore Tax