Stienberg Tan Geok Yong (“Stienberg”), 37, the partner of Stienberg & Lindsey Food and Beverage (“SLFB”) was convicted for making false claims of GST refunds amounting to $105,536.22 and was sentenced to 2 months’ jail.

Stienberg was brought to court for 5 charges of making fraudulent claims of GST refunds for the period 1 April 2004 to 30 June 2005. In addition, for deliberately ignoring IRAS’ queries on his business activities on several occasions, Stienberg was also charged for failing to comply with notices issued by the Comptroller of Goods and Services Tax.

GST-registered businesses can offset the GST they pay on their purchases (input tax) against the GST they charge on sales (output tax), paying the net difference to IRAS. If a business incurs more GST on purchases (input tax) than it collects from sales (output tax), it can claim the difference as GST refund from IRAS.

IRAS has an extensive audit programme to identify errors and non-compliance in GST reporting. In the case of SLFB, which is in the business of importing and distributing processed food, the audit programme identified anomalies in the GST returns submitted by SLFB. Upon further investigation, it was found that Stienberg had fabricated the amounts of taxable purchases and supplies in the GST returns and made inflated and fictitious claims for GST refunds.

Stienberg pleaded guilty to five charges of overstating input tax and making false entries in the GST returns of SLFB. In addition to the jail term, the court also ordered Stienberg to pay a penalty of $316,608.66, which is three times the amount of GST undercharged. The remaining charge was taken into consideration in sentencing.

Voluntary Disclosure Pays, Tax Crime Does Not

IRAS takes a serious view of GST-registered businesses that wilfully make false claims for GST refunds or under-charge GST on sales. Tax evasion is a criminal offence punishable under the law and the Court imposes severe penalties for such offences. Businesses or 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.

Those who wish to disclose past mistakes or evasion or report malpractices that might indicate tax evasion should write to:

The Comptroller of GST
Inland Revenue Authority of Singapore
55 Newton Road, Revenue House
Singapore 307987
Email: [email protected]
Tel. Number: 1800-356 8633
Fax Number: 6351 3553

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

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