Singapore GST – Former Singapore Customs Officer Jailed for Fraudulently Obtaining GST Tourist Refunds


It was reported in IRAS’ website on 20 April 2018 that Ms. Pang Yeow Biah, who was a former Singapore Customs Officer, was charged for fraudulently obtaining GST tourist refunds under the electronic tourist refund scheme (“eTRS”).

Between 2012 and 2014, Pang was a Singapore Customs officer who was deployed at the GST Refund Inspection Counter at Changi Airport.  Her main duty was to process GST refund claims made by tourists leaving Singapore.  When the opportunity arose during her course of work, she would take the details of these “rejected” GST refund claims and use the eTRS system to electronically process the GST refunds into her own credit cards or credit cards that were under her control.  In addition, Pang had used the eTRS self-help kiosks to obtain the GST refunds which she was not entitled to.

The GST refunds were obtained through Pang’s misuse of two credit cards that were registered in her son’s ex-girlfriend’s name but under Pang’s control.  Pang then used the GST refunds to repay her own credit card debts.

Pang pleaded guilty to 10 charges of fraudulently obtaining GST tourist refunds amounting to $8,302.05 under section 62(1)(e) of the GST Act and three charges under section 47(1)(c) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“CDSA”).

The court sentenced Pang to 15 months’ imprisonment and a penalty of $24,906.15, which is 3X  the amount of tax defrauded. Pang was sentenced to 4 weeks’ imprisonment for her CDSA offences, resulting in a total sentence of 15 months and 4 weeks’ imprisonment.

Message from Singapore Customs and IRAS

  1.   Measures such as built-in system checks are in place to identify cases to be selected for further inspection. Through data analytics, IRAS and Singapore Customs are able to detect suspicious GST refund claims and fraudulent activities.
  2. Singapore has always adopted a zero-tolerance approach towards tax fraud, money laundering, and other criminal activities. The authorities take a serious view of such criminal practices and will take swift action against any individuals and parties involved.

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Singapore GST – Revised e-Tax Guide on ACAP


The Inland Revenue Authority of Singapore (“IRAS”) revised the e-Tax Guide on the Assisted Compliance Assurance Programme (“ACAP”) on 2 April 2018 by extending the current penalty waiver from 31 March 2019 to a final extension date of 31 March 2024.

In other words, IRAS will be prepared to waiver penalties for genuine non-wilful GST errors in the course of ACAP review when the taxpayer

  •  notify IRAS by 31 Mar 2024 of his intention to embark on your first ACAP;
  • settle the additional taxes; and
  • attain ‘ACAP Premium’ or ‘ACAP Merit’ status.

According to the e-Tax Guide, this is a one-time of the normal 1-year grace period under the IRAS’ Voluntary Disclosure Programme (VDP), as recognition of your efforts to strengthen the effectiveness of the overall GST controls to ensure continual GST compliance. If any of the above conditions is not satisfied, IRAS may impose a reduced penalty under the normal VDP rules, for non-wilful GST errors made.

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Income Tax – Three individuals to be charged for tax evasion of rental income


It was reported on IRAS’ website on 16 March 2018 that 3 individuals were charged in the court in 2 separate cases for tax evasion on their rental income.

  • 2 persons were charged on 16 March 2018, for the omission of rental income from their tax returns.  More specifically, one of them faced 4 charges involving omitted rental income amounting to $411,252 for Years of Assessment (YAs) 2010 to 2013 which resulted in a total of $69,065.20 in tax undercharged. The other faced 3 charges involving omitted rental income amounting to $299,769 for YAs 2012 to 2014 which resulted in a total of $52,854.75 in tax undercharged. In addition, this individual will face another charge for the non-filing of his income tax returns.
  • One would be charged on 13 April 2018  for submitting falsified invoices to IRAS to support claims made for rental expenses between YAs 2009 to 2013. The individual will face 5 charges involving the submission of falsified invoices that amounted to $284,308.52. This resulted in a total of $56,499.91 in taxes undercharged.

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Hong Kong Profits Tax – Two-Tier Profits Tax Rate Comes Into Effect on 1 April 2018


On 29 March 2018, the  Inland Revenue (Amendment) (No. 3) Ordinance 2018 (“the Ordinance”) was gazetted to implement the two-tiered profits tax rates regime announced in the 2017 Policy Address by Ms. Carrie Lam, the Chief Executive of HK SAR.

The new two-tier profits tax structure will be effective to any year of assessment commencing on or after 1 April 2018

  • The profits tax rate for the first HK$2 million of profits of corporations will be lowered to 8.25%.  Profits above that amount will continue to be subject to the tax rate of 16.5%
  •  For unincorporated businesses (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5% and 15% 

The above two-tiered profits tax rates regime is implemented to benefit the most to the small and medium enterprises (SMEs).  Large corporations should not that the regime is restricted to only one enterprise nominated among connected entities.

A Comparison of the Effective Tax Rate between Singapore and Hong Kong

Let’s do a comparison between Hong Kong and Singapore based on the scenario of a company having an assessable profit of HKD3,000,000 (or SGD500,000).

Effective tax rate if the company is incorporated in Hong Kong – 11%
Effective tax rate if the company is incorporated in Singapore – 12% (and this will be increased to 14% as a result of the revision of the Partial Tax Exemption Scheme).

Our comments:  Although Taxation is never the only factor for a company to consider the location of setting up the business, it certainly becomes slightly more attractive for the business to be set up in Hong Kong from an effective rate perspective unless the same business can obtain more tax breaks or reliefs from a Singapore tax perspective.  The Singapore Government has to work harder on this to maintain its competitiveness with Hong Kong.

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Income Tax – Director of metal stamping company to be charged for tax evasion


It was reported in IRAS’ website on 22 March 2018 that a company director was charged in court for assisting his company to evade tax.  He faced 5 charges involving the making of false entries in his company’s income tax returns from Years of Assessment (YAs) 2009 to 2013, which resulted in $648,427.90 in tax undercharged.

In addition, he will face 17 charges for without reasonable excuse, making an incorrect return by understating output tax in his company’s GST returns amounting to $266,870.58 during the same period.

What does this mean to you?

Upon conviction, he may face a penalty of two times the amount of tax undercharged, and a fine not exceeding $5,000 or to imprisonment for a term not exceeding 3 years or to both.

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