Income Tax – Why Is It Critical For Taxpayers To Comply With Tax Law?

Dear Friends and Business Associates,

As the title suggests, it is critical for all taxpayers to comply with the tax law and if in doubt, consult your Accredited Tax Advisors from Singapore Institute of Accredited Tax Professionals.  Many taxpayers in SIngapore I know want to save costs and as a result they will resolve the tax issues on their own or seek tax input from non-accredited tax advisors in Singapore because their service charges would be lower than Accredited Tax Advisors.  Here is a question for you to consider – do you focus on how much you can save as a result of getting advice from non-accredited tax advisors only?  If so, I would like to invite you to think about how much would it cost you for getting advice from them and in the end, it is regarded as incomplete, resulting in the tax treatment being disagreed with IRAS.?

Incidentally, it is also critical for taxpayers not to cheat IRAS.  If you believe you can outsmart IRAS and save a few dollars on your tax liability, think twice.  Why?

It was reported in IRAS’ Website on 18 May 2012 that a company was ordered to pay a fine of $40,000 and a penalty of roughly $745,000 for creating false business expenses to evade tax.  Under our tax law, a taxpayer can be imposed a penalty of 4 times of the amount of tax undercharged if IRAS regards that person has the willful intention to evade tax or assist another person to evade tax.

In this particular case, the taxpayer is a prominent company in the technology solutions industry, specializing in electronic systems for the healthcare, aviation and traffic management sectors.  In an investigation conducted by IRAS, it was found that the taxpayer prepared and maintained false invoices for Years of Assessment 2006 and 2007 with the willful intent to evade tax.

The Comptroller of Income Tax compounded the tax offences of the directors at roughly $713,000 and $312,000 respectively for 1999 to 2002 and 2004 to 2007. The total penalty and composition to be paid by both the company and the directors amounted to $1,800,000 approximately.

What does this mean to you?

If you have concern whether your tax returns have been filed properly or any contentious tax treatment has been applied with supportable basis under our tax law, it is important that you seek professional tax advice from Accredited Tax Advisors from the Singapore Institute of Accredited Tax Professionals.  If it is determined that voluntary disclosure to IRAS is required, stay cool as experienced Accredited Tax Advisors will be in a better position to advise you what to do and how to do it.

If you have any questions or comments on this alert, please contact us at me

Best regards
Jack HM Wong, FCPA Singapore
Accredited Tax Advisors (Income Tax and GST)
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
Website: http://www.whm–
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