Lam Allan (“Lam”), a 30-year-old former insurance agent, had under-declared a total of $294,410 in trade income for Years of Assessment (YAs) 2013 and 2014, which had resulted in $51,173 in taxes undercharged.

The Prosecution proceeded on one charge (for YA 2014 – $50,348 tax undercharged) and applied for the remaining charge (for YA 2013 – $825 tax undercharged) to be taken into consideration for the purpose of sentencing. The Court convicted Lam on the proceeded charge. The Court sentenced Lam to 4 months’ jail and ordered him to pay a penalty of $151,044, which is three times the amount of taxes evaded.

Facts of the Case

Investigations revealed that Lam had, with the wilful intent to evade tax, claimed fictitious business expenses in his tax returns for YA 2013 and 2014 to under-declare his trade income.

For YA 2013 and 2014, Lam declared his trade income to be $53,322 and $123,796, when in fact it was $70,172 and $401,356 respectively.

During an audit, Lam was asked by IRAS to substantiate his business expenses claims. Instead of coming clean about his fictitious business expenses, Lam went on to submit 36 forged payment vouchers. These vouchers, amounting to $84,000, were for referral fees purportedly paid to 3 individuals (who were his insurance clients) when in fact no such payments were made. Other business expenses declared by Allan were also found to be false.

Prosecution sought stiff imprisonment sentence in view of significant degree of planning and premeditation

In its sentencing submissions, the Prosecution sought a stiff imprisonment sentence based on a new sentencing framework for income tax evasion, which takes into account the harm caused by the offender and his or her culpability. IRAS submitted that there was a significant degree of planning and premeditation on the part of the offender. Besides making multiple false entries in his income tax return to claim fictitious business expenses, Lam went further and forged payment vouchers to cover up his false business expenses claim. The particulars of three individuals who bought insurance from Lam were used in the forged payment vouchers. 

IRAS Warns Against Tax Evasion

IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who wilfully evade tax. Taxpayers are ultimately responsible for the information declared in their income tax returns. The authority will not hesitate to bring offenders to court. Penalties for tax evasion can be up to four times the amount of tax evaded. Jail terms may also be imposed

Reporting of Malpractices

Businesses or individuals are encouraged to immediately disclose any past tax mistakes. IRAS will treat such disclosures as mitigating factors when considering action to be taken. Those who wish to disclose past mistakes or report malpractices can write to:

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

Email:[email protected]

Cash Rewards for Informant

A reward based on 15% of the tax recovered, capped at $100,000, will be given to informants if the information and/or documents provided lead to a recovery of tax that would have otherwise been lost. All payments are at the discretion of the Comptroller. IRAS will ensure that the identities of informants are kept strictly confidential.

Inland Revenue Authority of Singapore