Positive Engineering Pte Ltd (宝利工程私人有限公司, “PEPL”), a company that specialises in fabricating and installing aluminium panels and fire-rated doors as well as non-building construction services, was convicted of tax evasion for Years of Assessment (YA) 2008 and 2009. PEPL was ordered to pay a fine of $12,000 and a penalty of $250,990.92, three times the total amount of tax evaded.

Company did not report Income to Evade Tax

In the course of its business, PEPL sold scrap materials to a scrap dealer from 2007 to 2008. Investigations revealed that over these two years, PEPL had neither kept records nor issued sales invoices to the scrap dealer for these transactions. Some of the sales proceeds were not deposited into PEPL’s bank account but either kept by Madam Ng Chan Kheng, one of the company directors, or deposited into her personal bank account held jointly with another director.

Subsequently, PEPL failed to report the income earned from the sale of the scrap materials in its audited accounts and Income Tax Returns for YA 2008 to 2009. This resulted in under-reporting of income totalling $464,798 for PEPL and correspondingly, tax undercharged of $83,663.64 for both YAs.

Businesses Should Keep Proper Records

IRAS would like to remind all businesses to keep proper records and accounts of all their transactions to support their income tax declarations. This includes issuing serially numbered sales invoices for the goods or services provided by them, as well as ensuring that all earnings are accurately reflected in the accounts and duly reported in their Income Tax Returns.

Lower Penalties for Accurate and Complete Voluntary Disclosure

IRAS recognises that some companies and individuals make mistakes in their tax reporting because they are negligent or unaware of their tax obligations. 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. Nevertheless, it is important that such voluntary disclosure is accurate and complete.

Reporting of Past Mistakes or Possible Tax Evasion

Those who wish to disclose past mistakes or who wish to report malpractices of others that might indicate tax evasion can 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.

Inland Revenue Authority of Singapore