Tag Archives: PIC

Income Tax – Director Behind PIC Sham Convicted


It was reported in IRAS’ website on 20 July 2017 that Selladorai Dharmalingam (“Selladorai”), the sole director of Al Bright Construction Pte. Ltd. (“Al Bright”), has been convicted and sentenced for abusing the Productivity and Innovation Credit (PIC) scheme by giving false information to illegally obtain a PIC cash payout and bonus for Al Bright.

IRAS’ investigation revealed that Selladorai authorized the submission of the PIC Cash Payout Application Form by Al Bright to claim $50,461.20 in PIC cash payout and $15,000 in PIC bonus, for the purported expenditure of $84,102 to purchase an electric overhead crane.  However, there was no such expenditure incurred by Al Bright nor any such equipment was purchased.

Selladorai was convicted of giving false information to the Comptroller of Income Tax in order to obtain a PIC cash payout and PIC bonus which the company Al Bright was not entitled to. The court ordered Selladorai to pay a fine of $3,500 and a penalty of $100,922.40, twice the amount of PIC cash payout that Al Bright had wrongfully obtained, and sentenced him to 12 weeks’ imprisonment in default of payment.

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 fraud will have to pay a penalty of up to four times the amount of cash payout fraudulently obtained, or which would have been obtained if the offence had not been detected, and a fine of up to $50,000 and/or imprisonment of up to five years.

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

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Income Tax – PIC Promoter to be charged for role in PIC claims of over $1 million


It was reported in IRAS’ website on 26 Jan 2017 that a sole proprietor of a consultancy firm was alleged acted as the “promoter” of the PIC Scheme and would face 58 charges of assisting 49 claimants to obtain PIC cash pay-outs and bonuses involving a total amount of approximately $1.1M fraudulently.

Over the past year, IRAS had conducted extensive investigations into a number of suspicious PIC claims. Its investigations revealed that many of such claims were linked to this PIC promoter.  About 200 persons were called up to assist in these investigations. IRAS will take enforcement actions against the claimants, where appropriate, once the investigations are completed.

IRAS said that from the investigations it was found out that many promoters have sought out individuals not carrying on business to register companies and businesses purely to make false claims.  In a typical fraudulent PIC scam, the PIC promoter may assist claimants by providing false documentation to help support the expenditures declared in their PIC cash payout applications.  Such documentation may include false employment contracts, working timesheets, payment vouchers, product flyers or brochures, quotations, and invoices.

In addition, where the claimants do not fulfill the PIC application condition of three local employees, the PIC promoter would provide the names and particulars of up to three unrelated persons just for the purpose of falsely representing to IRAS that the claimants have met the prerequisite of three local employees. These false employees could include friends, relatives, retirees and unemployed persons. Some of these false employees might not have known that their names had been used for PIC claims.

In return for facilitating the false PIC claims, the PIC promoter will take a cut from the PIC cash payouts given to the claimants.

What does it mean to you?

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government. In particular, IRAS will take stern action against promoters who facilitate illegal activities.

Anyone who commits PIC offences with wilful intent might be subject to penalties of up to 4X the amount of PIC cash payout and bonus fraudulently obtained (or which would have been obtained if the offence had not been detected), and a fine of up to $50,000 or imprisonment of up to five years.

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

Income Tax – Revised e-Tax Guide on Productivity & Innovation Credit


The IRAS has issued the fifth edition of the e-Tax Guide on Productivity and Innovation Credit on 22 November 2016 with a view to incorporating the Budget 2016 changes:

  •  Expiry of the PIC Scheme in YA 2018,
  • Reduction in the PIC cash payout rate from 60% to 40% for qualifying expenditure incurred on or after 1 Aug 2016,
  • Compulsory e-Filing of PIC cash payout applications with effect from 1 Aug 2016.

Other amendments include the following:

  •  Remove information on PIC bonus which expired after YA2015.
  • The evaluation criteria for the case-by-case approval of automation equipment (see Annex A)  Remove paragraph on the clarification of the basic tool criteria c. Enhanced Writing-Down Allowance (“WDA”) and Deduction for Intellectual Property Rights (“IPRs”)
  • Enhancement to allow companies to make an irrevocable election to claim the WDA over a five, ten or fifteen-year period (on a straight line basis) on capital expenditure incurred in acquiring the IPR – with effect from YA 2017.

If you have any questions regarding the above, please contact support@whm-consulting.com.

Income Tax – Man Charged for Cheating in respect of PIC Fraud


It was reported on IRAS’ website on 18 November 2016 that Lim Chit Foo was charged with five counts of Abetment by Conspiracy to Commit Cheating under the Penal Code, in respect of claims made under the Productivity and Innovation Credit (PIC) Scheme. If convicted, the offender would be punished with imprisonment for a term which may extend to 10 years, and is also liable to fine.

In this case, 28 companies have been investigated by IRAS in a suspected PIC group fraud. As part of the investigations, IRAS conducted an island-wide raid operation at multiple locations including Genting Lane, MacPherson and Balestier Road in October 2016. Computers, mobile phones and business records were seized during the operation.

As IRAS’ initial investigation revealed possible offences under the Penal Code, the case has been referred to the Commercial Affairs Department (CAD) of the Singapore Police Force for further investigations.

What does this mean to you>

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government. Under the Income Tax Act, anyone convicted of an offence of abusing the PIC Scheme will have to pay a penalty of up to four times 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 $50,000 and/or imprisonment of up to five years.

Cases involving possible offences under other laws may be referred to the relevant enforcement agencies for investigation.

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

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.

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