Income Tax – Business and Management Consultancy Owner Convicted of PIC Fraud

It was reported on IRAS’ website on 15 July 2016 that K H Raja Mohamad Bin Maiden (“K H Raja Mohamad”), the sole proprietor of Qaizar Consultancy, has been convicted of giving false information to the Comptroller of Income Tax in order to obtain a Productivity

K H Raja Mohamad made a PIC cash payout claim for the $99K expenditure that Qaizar Consultancy had purportedly incurred on the purchase of software in the YA 2013, for the qualifying financial period from Oct 2012 to Dec 2012. However, IRAS’ investigations revealed that Qaizar Consultancy was registered with the Accounting and Corporate Regulatory Authority 10 Apr 2013, two days after the false PIC cash payout claim was made.  K H Raja Mohamad had backdated the business commencement date in order to falsely qualify for the PIC cash payout claim. No business or trade had been conducted under Qaizar Consultancy.  It was also found out by IRAS that K H Raja Mohamad had agreed with the software vendor to backdate the software purchase invoice even when the business and expenditures were non-existent during the said qualifying financial period.

To make his claim appear legitimate, K H Raja Mohamad also backdated contributions to the CPF accounts of three individuals, in order to represent them as Qaizar Consultancy’s local employees when in fact they were not.

In the end, K H Raja Mohamad was convicted of the charge that he, without reasonable excuse, gave false information to the Comptroller of Income Tax to obtain the PIC cash payout which he was not entitled to. The court ordered K H Raja Mohamad to pay a penalty of $118K, which is 2X the amount of the PIC cash payout that would have been disbursed to Qaizar Consultancy if the false claim was not detected by IRAS. He was also ordered to pay a $4,500 fine.

What does this mean to you? 

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government.  Offenders convicted of PIC abuse will have to pay a penalty of up to 4X the amount of PIC cash payout fraudulently obtained or which would have been obtained if the offence had not been detected, and a fine of up to $10,000 and/or imprisonment of up to five years.

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