Singapore is one of the places in Asia that ranks high as being amongst the most accessible location to do business. Meanwhile, for Singapore to stay ahead of the competition within the industry, it needs to increase its digitisation, especially when it comes to tax and accountancy.
While electronic invoicing has become a useful tool to counter the tax evasion in the country, Singapore has yet to mandate the submission of tax invoices electronically. It is in contrast to nearly 50% of the Asia-Pacific markets as well as two-thirds of the North and South America market that have made the electronic submission obligatory. Thus, a considerable number of Singapore companies and accounting services still do their invoices manually.
Singapore’s Accounting Standards and Why its Tax and Accounting Industries Need to Digitise More
Global Business Complexity Index for Accounting and Tax report analysed the chief trends and practice in tax and accounting of 76 jurisdictions across the world. The goal of the study is to determine the complexity level that multinational companies need to deal with as they run their business abroad. This first study, which comes from a series of three studies, is created according to the statistics and research of local industry experts.
Due to the increasing numbers, sizes, and reaches of the multinational companies, a comparable standard reporting is essential. Fortunately, Singapore had adapted quite well to the global accounting standards to gain substantial harmonisation. This trend can only be found in a little over 20% of the Asia Pacific’s jurisdiction.
The transformation from local to IFRS or SFRS emphasise this trend of getting higher convergence within the industry standards to minimise the financial reporting expenses for the bodies reporting in several jurisdictions and promote a stable financial system in the country.
Furthermore, Singapore is one of the 83% jurisdictions across the world that enforces considerable fines for violations of tax and accounting standards. The city also imposes a heavy sanction. These preventive approaches relinquish corruption and promote a trustworthy business atmosphere for global investment within the country.
Nevertheless, to become a global accounting services hub and stay ahead of the competition, Singapore needs to adopt the latest digital technologies, such as artificial intelligence, cloud computation, and blockchain. The adoption of technology in these sectors can significantly produce more accurate reports with a quicker turn-around-time.
The Progress of Digitisation in Singapore’s Tax and Accounting Sector
Compared to other Asian counterparts, Singapore is way behind the competition when it comes to digitisation. In actuality, the country is within the minority of 46% of jurisdictions in the area where the electronic submission of a tax invoice is not mandatory.
Companies could smoothly adapt to the new changes, involving the adaptation of a new process for tax and accounting, as long as they have the right knowledge and the proper support.
Presently, the country is performing well with its substantial and evolving tax and accounting regulations. As more companies adopt innovative technologies, the country’s industry’s digitisation will manage to pick up the pace in time.
The Singapore Accountancy Commission, ISCA, and IMDA develop the Accountancy Industry Digital Plan (IDP), which was released recently to transform the accountancy services in Singapore digitally. The plan aims to help the majority of the accounting industry, which primarily involves the SMPs, to embark on digital transformation.
This plan will focus on three strategies, including improving digital knowledge and expertise, encouraging the embrace of technology, as well as advancing innovations and technology for accounting. It also contains a digital roadmap. The roadmap offers guidelines about the kind of digital solutions to take and the staff training to undertake at every phase of SMPs’ progress.
Management of Accounting and Tax as a Balancing Act
The management of tax and accounting will always be a balancing act as the authority continues to make an effort towards the alignment with global standards and at the same time, simplify the ordeal to improve competence.