Mr. Lee Chin Bing Danny (“Danny”), 43, who is in the business of trading in automotive spare parts and accessories, was convicted for evading GST and income tax. He was sentenced to one month and two weeks jail and ordered to pay a penalty totalling $183,088.92.

The sole-proprietor of Sourcing & Procurement Asia Pacific (“S&P”) faced 13 charges for failing to account for GST of $111,454.82 collected from customers between April 2003 and September 2006. He was also charged for under-reporting income of $900,782 from S&P and evaded an amount of $150,266 in income tax from 2004 to 2007.

GST-registered businesses are required to account to IRAS the GST collected from their customers. They must also keep proper business and accounting records to substantiate their GST and Income Tax declarations. Danny had deliberately made wrongful declarations in his GST and income tax returns. He had also failed to keep adequate records and accounts for his business. Despite the missing business records, IRAS’ investigations were able to establish the amount of GST and the income under-declared based on records and information obtained from S&P’s transactions with its customers.

Danny pleaded guilty to two charges of evading GST by under-stating output tax in his GST returns. He also pleaded guilty to two charges of evading income tax by under-reporting his income from S&P.

For his GST offences, Danny was ordered to pay a penalty of $57,863.52, which is three times the amount of GST undercharged. For his income tax offences, he was ordered to pay a penalty of $125,225.40, which is three times the amount of income tax under-charged. In default of paying the income tax penalty, he would be sentenced to 5 months’ of imprisonment. The remaining charges were taken into consideration in sentencing.

Businesses must keep records to support declarations

IRAS would like to remind all businesses to keep proper records and accounts of all their transactions. Businesses must keep their records up-to-date and ensure that the records support their GST and income tax declarations.

Voluntary Disclosure Pays, Tax Crime Does Not

Tax evasion and tax fraud are criminal offences punishable under the law and the Court imposes severe penalties for such offences. Businesses and individuals should disclose any past tax evasion immediately. IRAS will treat such disclosure as a mitigating factor when considering the penal charges. IRAS is also aware that some businesses and individuals could be negligent or unaware of their tax obligations, resulting in mistakes. IRAS views such mistakes differently from tax evasion. In the spirit of encouraging voluntary compliance, IRAS imposes lower penalties for such mistakes disclosed voluntarily by taxpayers.

Taxpayers who wish to disclose errors in their GST and Income Tax returns or report malpractices that might indicate tax evasion should email to [email protected] or write to:

Inland Revenue Authority of Singapore
Investigation & Forensics Division
55 Newton Road, Revenue House
Singapore 307987

IRAS will ensure that the identities of informants are kept confidential.

More information on voluntary disclosure is available in IRAS’ e-Tax Guide (PDF, 476KB).

Inland Revenue Authority of Singapore