Category Archives: Tax Evasion

Income Tax – Sole proprietor convicted for PIC sham


It was reported in IRAS’ website on 3 August 2018 that Lim
Mei Lee, who is a sole proprietor of Wahla Balloon, has been convicted and sentenced for abusing the Productivity and Innovation Credit (“PIC“) scheme by giving false information to illegally obtain PIC cash payouts and bonuses for Wahla Balloon.

Investigations by IRAS revealed that Lim gave false information to the Comptroller of Income Tax (“CIT“) by stating in Wahla Balloon’s PIC application forms that the business had incurred qualifying PIC expenditure when no such expenditure had been incurred.

The forms were submitted between November 2013 to July 2014 to claim $11,953.80 in PIC cash payouts and $13,269 in PIC bonuses for the purported expenditure of $19,923 to purchase items such as balloon inflators and to attend balloon making workshops.

Lim thus committed an offense by giving false information to illegally obtain PIC cash payouts and bonuses that she was not entitled to.

Lim faced a total of 8 charges of giving false information to the CIT to illegally obtain PIC cash payouts and bonuses. She pleaded guilty to 3 proceeded charges, involving a total amount of PIC cash payouts and bonuses of $13,204.60, with the other 5 remaining charges being taken into consideration for the purposes of sentencing. The Court ordered Lim to pay a fine of $9,000 and a penalty of $26,409.20, 2X the amount of cash payouts and bonuses illegally obtained, and sentenced her to 23 weeks’ imprisonment in default of payment.

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Singapore GST – Accomplice of GST fraud mastermind put in jail


It was reported in IRAS’ website on 2 August 2018 that
Sng Kay Heng who is a sole proprietor of Strikey Trading was found guilty and convicted of making false entries in the GST returns of his business entity, resulting in GST refunds totaling $30,806.61.

Sng was the accomplice of Eric Chan, who was convicted in July 2014 for masterminding a complex GST scam by using multiple shell entities and colluding with Sng to defraud the Comptroller of GST of GST refunds.  Sng had voluntarily registered himself for GST in October 2005.

IRAS’ investigations revealed that Sng, who elected to file his GST returns on a monthly basis, made false entries in his GST returns for the accounting periods ended November 2005, December 2005 and January 2006.

Investigations further revealed that the suppliers whom Strikey Trading had purportedly made purchases from confirmed that they did not make any sales to Strikey Trading.

Sng had claimed trial to 3 GST charges of making false entries with wilful intent to evade tax in his GST returns.  The Court sentenced Sng to 6 weeks’ imprisonment and ordered him to pay a penalty of $92,000, which is 3X of the amount of tax undercharged.

What does this mean to you?

Under Singapore GST law, it is a serious offense to claim GST input tax on fictitious purchases or understate output tax on sales. Offenders face a penalty of up to 3 times the amount of tax undercharged, a fine not exceeding $10,000, and/or imprisonment of up to 7 years.

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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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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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Singapore GST – Company Director Convicted for Unlawful GST Collection


It was reported in IRAS’ website on 19 Jan 2018 that Kumarselvam S/O Veejay Koumar, who was a director of MV Global Trading Pte Ltd, flouted the law when his company unlawfully charged GST on a total of 102 sales invoices issued to its customers.

IRAS’ investigations revealed that MV was not GST-registered and Kumarselvam knew that this is the case.  The offenses were detected only because of IRAS’ efforts in conducting checks on businesses before allowing any business to register for GST. Investigations further revealed that Kumarselvam was the person in charge of managing and overseeing MV’s operations at the relevant time.  He had personally prepared and issued 3 of the 34 sales invoices and instructed his staff to prepare and issue the other sales invoices to customers, which charged the prevailing rate of GST on these sales. The “GST” amount was reflected on the said invoices issued.

As MV was not GST-registered, it did not file any GST returns or account for the “GST” collected from MV’s customers to the Comptroller of GST.

In the end, Kumarsalvam pleaded guilty to the 34 charges proceeded on. For being a director when MV unlawfully charged $3,791.21 as GST, the court sentenced Kumarselvam to a penalty of $11,373.63, which is 3X the amount shown as tax, and a fine totaling $51,000. In default of paying the penalty and fine, he has to serve a total of 125 days’ imprisonment. Another 68 similar charges were taken into consideration in sentencing.

What does this mean to you? 

It is a serious offense for businesses that are not GST-registered to charge and collect GST from their customers. Offenders face a penalty of three times the amount of tax unlawfully collected and a fine of up to $10,000 for each offense.

Please take note that IRAS conducts audits to identify non-compliance with GST laws, including checks on whether businesses charge and collect GST correctly.

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