Category Archives: Tax Evasion

Income Tax – Boss of interior design firm to pay penalty of more than $400,000 for under-declaring income


It was reported on IRAS’ website on 5 October 2018 that Lim Hong Hee, a proprietor of Classic Furniture Design and Renovation Works (“Classic”), an interior design firm, has been convicted for filing incorrect income tax returns for Years of Assessment (YAs) 2006 to 2009 and 2011, which had resulted in $293,977 in taxes undercharged.

IRAS detected anomalies in the declarations made in Lim’s income tax returns during one of its regular audit programmes. Investigations revealed that Lim did not report a total of $1,772,704 of Classic’s trade income in his income tax returns for YAs 2006 to 2009 and 2011. Instead, Lim paid himself a salary from Classic and only declared that employment income to IRAS for the relevant YAs, which was significantly lower than Lim’s actual trade income from Classic. This resulted in $293,977 in taxes undercharged.

Lim used Classic’s trade income for his own household expenses, as well as to purchase properties and shares. This included an investment by Lim of $845,000 in shares between 12 January 2009 and 3 October 2011.

Lim faced a total of five charges of filing incorrect income tax returns for YAs 2006 to 2009 and 2011. He pleaded guilty to two out of the five charges, involving a total of $210,673 in taxes undercharged, with the three other charges being taken into consideration for the purposes of sentencing. The Court sentenced Lim to a total fine of $10,000 ($5,000 per charge) and a penalty of $421,347, which is two times the amount of tax undercharged.

What does this mean to you?

IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who wilfully evade tax. Taxpayers are ultimately responsible for the information declared in their income tax returns. The authority will not hesitate to bring offenders to court. Penalties for tax evasion can be up to four times the amount of tax evaded. Jail terms may also be imposed.

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Income Tax – Sole-proprietor to pay penalty for omission of income


It was reported on the IRAS’ website on 17 September that Tan Siew Hoon Pauline, the sole-proprietor of Staffing Network which provides recruitment services, pleaded guilty on 30 July 2018 to 5 charges of understating her income without reasonable excuse for Years of Assessment (YAs) 2009 to 2013.

IRAS’ Investigations revealed that Tan had only declared $444,633 in her income tax returns for YAs 2009 to 2013 when the net income earned was $1,748,058.  Further, Tan did not notify the Comptroller of GST when the taxable turnover of Staffing Network had exceeded $1m in Year 2009.

Tan was the sole signatory of Staffing Network’s bank account and she personally managed and prepared the accounts of Staffing Network. She tracked the revenue payments from her customers, made payments for Staffing Network’s operating expenses and banked in customers’ cheques into Staffing Network’s bank account.

The court sentenced Tan to pay a penalty of $344,522, which is 2X the tax undercharged of $172,261, and a fine of $17,500.  One other charge of failing to notify the Comptroller of Goods and Services Tax of her liability to be registered for GST was taken into consideration for sentencing.

What does this mean to you?

IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who either give incorrect returns or wilfully evade tax. Penalties for tax evasion can be up to four times the amount of tax evaded. Jail terms may also be imposed.

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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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