Tang Ee Boon ("Tang"), 32, the managing director of V-Teb Services Pte Ltd ("V-Teb") was convicted of GST fraud amounting to $327,837.49 and was sentenced to 12 months' jail.

Tang was brought to court for 21 charges of making inflated and false claims of GST refunds for the period 1 Jan 2004 to 30 Jun 2007.

GST-registered businesses can offset the GST they pay on their purchases (input tax) against the GST they collect from sales (output tax), and pay 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 records indicate that V-Teb provides cleaning services locally. Hence, the company is not expected to claim GST refunds. However, IRAS’ tax auditors noted that Tang, as the managing director of V-Teb, had submitted increasing amounts of GST refund claims in the GST returns on a frequent basis. Upon verifying the value of V-Teb’s taxable purchases with the alleged suppliers, IRAS auditors found that Tang had, over a period of 3 years, inflated the input tax claims in the GST returns in order to obtain inflated GST refunds from IRAS. Further investigations also revealed that Tang had failed to account for GST collected from V-Teb’s customers from 2004 to 2006. Tang also fabricated the amounts of taxable purchases and supplies in V-Teb’s GST returns.

Tang pleaded guilty to a total of 14 charges of evading GST, comprising three charges of understating output tax, eight charges of overstating input tax, and three charges of making false entries in V-Teb’s GST returns. In addition to the jail term, the court also ordered Tang to pay a penalty of $983,512.47, which is three times the amount of GST undercharged. The remaining charges were taken into consideration in sentencing.

IRAS takes a serious view of GST-registered businesses that wilfully make false claims for GST refunds or under-charge GST on sales. IRAS would like to remind all GST–registered businesses and any person responsible for making tax declarations that tax evasion is a criminal offence punishable under the law. When a person deliberately commits tax evasion or fraud, his actions inadvertently affect the society at large, because the tax revenue lost is revenue that could have been applied to other deserving needs.

In the spirit of encouraging voluntary compliance, IRAS imposes lower penalties for errors disclosed voluntarily by taxpayers. Taxpayers who wish to disclose errors in their GST returns 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. .