How an SME Owner Should Read the IRAS FY2025/26 Annual Report

IRAS released its FY2025/26 Annual Report on 4 September 2026. The headlines are macro: $97.3 billion in tax revenue collected, 9.4% higher than the previous financial year, accounting for 74.8% of the Government's Operating Revenue and 12.3% of Singapore's GDP.

Corporate Income Tax was the largest contributor at $34.4 billion, up from $30.9 billion. GST came in second at $21.7 billion, up from $20.0 billion, reflecting stronger consumer spending. Individual Income Tax added $20.9 billion.

That's the national picture. But if you run an SME, the report contains three numbers that matter more to you than the headline total.

One: $589 million recovered from 8,560 audit and investigation cases

This is the enforcement number. IRAS audited and investigated 8,560 cases in FY2025/26 and recovered approximately $589 million in taxes and penalties. Work that out per case and you're looking at roughly $69,000 recovered on average.

The point isn't that IRAS is out to get you. It's that audits have teeth, and they work. The businesses most exposed are the ones with incomplete records, unexplained discrepancies between reported and actual activity, and books that can't stand up to questions.

If your documentation is solid - invoices, GST filings, expense records, reconciliations - an audit is inconvenient but survivable. If it isn't, the average recovery figure tells you what's at stake.

Two: 0.64% arrears rate

The arrears rate measures assessed tax that remains unpaid. At 0.64%, Singapore's compliance rate is exceptionally high. IRAS attributes it to two things: strong taxpayer commitment, and effective enforcement.

For an SME owner, this number carries a message. Paying on time is the norm, not the exception. The system is built around the compliant majority, and the further you drift from that majority - late filings, missed payments, gaps in records - the more visible you become to an agency that recovers $589 million a year from those who drift too far.

Three: $1.2 billion in payouts to 126,200 businesses

Beyond collecting, IRAS processed close to $1.2 billion in disbursements to about 126,200 businesses through support schemes - the Progressive Wage Credit Scheme, Senior Employment Credit, and CPF Transition Offset among them.

That's real money flowing to businesses. But note what it requires: you have to be in the system, with records and filings that make you eligible. Support schemes reward businesses whose administration is in order.

What's coming next

The report also confirms the GST InvoiceNow requirement announced at the Committee of Supply 2026. All GST-registered businesses will be required to onboard InvoiceNow and submit invoice data directly to IRAS, phased from April 2028 to April 2031. Grants are available to ease the transition.

This is the direction of travel for everything in the report: digital as default. Near-total electronic payments. Pre-filled returns. Direct notices. The tax ecosystem is becoming fully digital, and the businesses that thrive in it will be the ones whose accounting is already there.

How to read this report

Read it as a preview of your operating environment. Tax activity is growing with the economy. Enforcement recovers real money. Support flows to businesses that are set up to receive it. And the digital transition has dates attached to it.

The SME response is straightforward. Keep books that are clean, current, and complete. File on time. Make sure your accounting system - not a shoebox of receipts - is the thing an auditor sees.

OCi System consolidates bookkeeping, invoicing, GST filing, and financial reporting in one platform. Real-time numbers. Proper records. Audit-ready when the moment comes.

Source: IRAS, 4 Sep 2026
https://www.iras.gov.sg/news-events/newsroom/iras-annual-report-fy2025-26