Goods & Services Tax – Company manager jailed for GST fraud

Dear Clients and Business Associates

It was reported on the IRAS’ website today that a manager of a Singapore company was sentenced to one week’s jail and was fined a penalty of approximately S$78,000 for assisting his company to make fictitious entries in the GST returns that allowed the company to claim a GST refund of approximately S$26,000.

According to IRAS, the company is in the business of wholesale trading.  The manager was found to have the wilful intent to defraud GST.   What he did was to overstate the input tax in the company’s GST returns for periods ended 31 May 2009 and 30 Sep 2009, resulting in net GST refund claims of approximately S$26,000.

Upon investigation by IRAS, the manager pleaded guilty to two charges.  He was sentenced to one week’s imprisonment on each charge, with sentences to run concurrently.  He was also fined a penalty of approximately S$78,000 which is 3 times of the amount of tax undercharged.

What does this mean to you?

We have seen many instances when IRAS has taken a serious view of GST-registered business that willfully make false claims for GST refunds or under-reporting GST liabilities.

Under Singapore tax law, tax evasion is a criminal offence.  However, if taxpayers disclose any past tax evasion immediately, IRAS would treat such disclosure as a mitigation factor when considering the penal charges.  Claiming input tax on fictitious purchases is an offence. Offenders face a penalty of up to 3 times of the amount of tax undercharged and/or imprisonment up to 7 years.

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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