Mini Environment Service Pte Ltd (“MES”), which operates dormitories and manages foreign workers, has been found guilty of tax evasion. It has pleaded guilty to three charges and has been ordered to pay a fine of $12,000 and penalty totalling $256,585.95. The penalty is three times the amount of tax undercharged of $85,528.65.

Investigations revealed that MES had included fictitious expenses amounting to $371,684 in its statements of accounts for 2001 and 2002. These comprised sub-contract fees purportedly charged by various sub-contractors when no work or services were performed by the companies for MES.

MES consequently claimed false tax deductions on the basis of these fictitious fees and under-reported its profits by the same amount of $371,684 in its income tax returns for the Years of Assessment 2002 and 2003.

MES was brought to court for 12 charges of preparing false statements of accounts and under-reporting its income for the Years of Assessment 2002 and 2003. The Comptroller proceeded on three charges and agreed to withdraw and compound the remaining nine charges for $1,095,646.

Voluntary Disclosure Pays, Tax Crime Does Not

Tax evasion/fraud 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:

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

Email: [email protected]

IRAS will 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).

Inland Revenue Authority of Singapore