IRAS conducts regular reviews of clubs/societies' gambling duties returns and their record-keeping procedures. During the audit visits, IRAS would gather information on the clubs or societies' operations, record-keeping practices and internal controls with respect to computation of turnover and duty payable, amongst others.

Common Errors Observed During Audits

Below are some common errors observed during these audits. We hope that a better understanding of these common mistakes will help clubs/societies to prepare and submit accurate and complete tax returns. Under the law, IRAS may impose penalties for the submission of an incorrect gambling duties return and for failure to keep proper records.

1. Audit Checklist For Form PL-R1 Not Maintained By The Clubs/Societies

We observed that a significant number of clubs/societies did not maintain a copy of the completed Audit Checklist for Form PL-R1.

With effect from the reporting month Jan 2012, all club/society-appointed auditors are required to perform a review of the Form PL-R1 based on the checks imposed by IRAS. These checks are meant to:

1. Guide the auditors in reviewing the PL Forms prepared by the clubs/societies

2. Ensure that the auditors perform all the required checks

Where the auditor noted any exception, the club/society should submit to IRAS the audit checklist with details of the exception together with its monthly filing of gambling duties return.

Where no exception is noted after the auditor has performed the review on Form PL-R1, the club/society need not submit the checklist to IRAS. Instead, the club/society should retain a copy of the completed checklist and submit it upon IRAS' request.

For more details, you may refer to the Audit Checklist for Form PL-R1 (version3) (DOCX, 40 KB).

2. Soft Meter Readings Inaccurately Reported Or Not Supported As A Result Of Meter Resets

As a result of meter resets, some clubs/societies were found to have reported:

1. Inaccurate soft meter readings; or

2. Soft meter readings which were not supported with relevant printouts.


Where possible, soft meter readings before and after a meter reset should be printed and kept to support the meter readings reported in Form PL-R1.

Care also has to be taken when recording and computing the correct Turnover and Total Wins meter readings for meter reset cases.

Please refer to the  Form PL-R1 (Reconciliation of soft and hard meter readings)version9 (XLSX, 66 KB) for an illustration of how meter readings should be reported in meter reset cases.

3. Failure To Comply With IRAS' Requirements Relating To The Hard Meters Of Gaming Machines

We noted that some clubs/societies:

1. Did not secure the gaming machine hard meter casing with a seal;

2. Did not maintain or keep the hard meter seal register up-to-date; and/or

3. Failed to label the hard meters of their gaming machines.

The hard meter readings are the next best alternative in ascertaining the Turnover of the machine in the event that the soft meter readings cannot be relied upon or are unavailable.
Requirement for Hard Meters of Gaming Machines
Clubs/societies are required to:

1. Mount the hard meters of every gaming machine with a cover.

2. Secure it with a serially numbered single-use seal to prevent tampering of the hard meter readings.

For good control and accountability, the replacement/breaking of the seal should be recorded in a Hard Meter Seal Register. The person who breaks the seal and another person who has witnessed the replacement/breaking of the seal should also acknowledge with their names, designations and signatures on each record. 

For more details, please see the Hard Meter Casing Seal Register(XLSX, 12 KB).

3. Ensure that the hard meter readings on every gaming machine are clearly labelled with “Turnover”, “Total Wins”, “Money In” and “Money Out”.

If the hard meters are not labelled accurately, clubs may be unable to extract the appropriate meter readings for correct reporting in Form PL-R1.

4. Retention of Soft Meter Printouts In Thermal Paper

We observed that soft meter printouts were retained in thermal paper. IRAS requires accounts, records and documents to be maintained in a legible form for a five-year period.

It is a good practice to photocopy or scan the soft meter printouts for long-term retention as the original printouts on thermal paper will fade over time.

5. Using Soft Meter Printouts To Prepare "Cash Collected" And "Handpays / Cancelled Credits" Under Form PL-R2

The Form PL-R2 is the reconciliation of the following:

1. Profit based on soft meters (i.e. meter readings); and

2. Profit based on manual records (i.e. actual cash flow).

We observed that some clubs/societies had wrongly used soft meter printouts instead of actual cash count/payout records to prepare the "Cash Collected" and "Handpays/Cancelled Credits" under manual records section of Form PL-R2.

As such, the actual variance between the profit based on manual records and the profit based on meters would not be flagged out for timely review and investigation.

With proper maintenance of the gaming machines and control over record keeping, it is possible to obtain a nil variance between the two profit figures.

The table below shows documents used for reporting manual records section in Form PL-R2.

Types of System
Cash Collected ($)
Handpays/Cancelled Credits ($)
Manual SystemCash count recordsHandpays records
TITO SystemCash count records + Ticket in reportHandpays records + Tickets Out report
Card SystemCash count records + e-Credits in reportHandpays records + e-Credits Out report

For good control, we recommend the club to set an acceptable threshold (say $5) and investigate any variance that is above the set threshold.

6. Hard Meter Readings Record, Cash And Hopper Count Records Were Not Signed By Preparer And Reviewer

We observed that the hard meter readings record, cash and hopper count records were signed by the recording staff only. To mitigate the risk of errors in manual recording, clubs/societies are advised to have the signatures of the preparer and reviewer on these records for better control and accountability.

7. Jackpot Prizes Awarded Were Not Reported In Forms PL-R, PL-R1 And PL-R2

Jackpot prizes awarded (such as Cascade payouts) refer to wins, which are excluded from metered Total Wins, awarded by a linked jackpot system. Such cascade payouts have to be reported in Form PL-R (under "Line 1b(i)"), Form PL-R1 (under "Jackpot prizes awarded") and Form PL-R2 (under "Column B" and "Column I") for computing GST amount as well as reconciliation purpose. In the event that the cascade payouts are not reported, GST amount will be overstated and gambling duty will be understated.

8. No Adjustment Made For Unredeemed Expired TITO Tickets, Unclaimed Credits And Unclaimed Winnings

During the audit, we noted that some clubs did not make adjustments for the following items under Form PL-R ("Line 1b(iii)"):

1. Unredeemed expired Ticket-In-Ticket-Out (TITOs) tickets

2. Unclaimed credits

3. Unclaimed winnings

The above adjustment items have to be excluded from the winnings paid as these amounts were not paid out to players. In the event when the adjustments were not made, the Total wins will be overstated resulting in GST amount understated and gambling duty overstated. For more information on the adjustments, please refer to explanatory note 7 of Form PL-R.