Income Tax – Taxpayer Jailed for Tax Evasion and PIC Fraud


Boss of Social Escort Agency Jailed for Tax Evasion and PIC Fraud

It was reported on IRAS’ website on 11 February 2016 that  Chew Tiong Wei (Chew), a sole-proprietor of a social escort business, was convicted of tax evasion and PIC fraud.

IRAS’ investigations revealed that Chew was first arrested by the Singapore Police Force (SPF) for vice-related offences in December 2014, and then he was found subsequently to have evaded income tax by under-declaring his business income for Years of Assessment (YA) 2012 and 2013.  What happened was that although Chew had kept proper business records, it was found that he had wilful intention to evade tax by making false entries in his income tax returns.  He used fictitious figures to report his income and thus, he had under-declared business income of S$275K for two years.

He was also found guilty for submitting false information with a view to obtaining a PIC cash payout and  PIC bonus when the business did not fulfil the 3-employees requirements.  The three persons named as Chew’s employees were found to be his father, mother and wife who had never worked for him in his business despite the fact that Chew made CPF contributions to their CPF accounts.

Chew was sentenced to  6 months’ jail for tax evasion, and was ordered to pay a total penalty of $80K, which is 3X the amount of tax evaded.  He was also ordered to pay a penalty of $$72K, 3X the PIC cash payout of $24,000 that he had wrongfully obtained, and sentenced to 6 months’ jail.

What does this mean to you?

Under the Income Tax Act, offenders convicted of PIC fraud will have to pay a penalty of up to 4X the amount of cash payout fraudulently obtained, and a fine of up to $50,000 and/or imprisonment of up to five years.  On the other hand, penalties for tax evasion can be up to 4X the amount of tax evaded and in certain situations, imprisonment may also be imposed.

If you have any questions, please contact us at support@whm-consulting.com

 

 

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