Lin Shaohua (“Lin”), a 50-year-old partner of two furniture-related businesses (Furniture Collection Centre and Yang Hua Furniture Trading), has been convicted of evading Income Tax and failing to register for Goods and Services Tax (GST) for her partnership business.

Lin had failed to register for GST when Furniture Collection Centre’s taxable supplies had exceeded $1 million by the quarter ending June 2010, which had resulted in $246,490 of GST undercharged. Lin had also wilfully with intent under-reported her share of partnership profits amounting to $444,870 in her Income Tax returns for the Year of Assessment (YA) 2016.

Court Sentences

For the Income Tax evasion, the Court sentenced Lin to a jail term of 10 weeks’ and a penalty of $237,426, which is three times the Income Tax amount evaded.

The Court also imposed on Lin a penalty of $24,649 and a fine of $4,000 for failing to register Furniture Collection Centre for GST.

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. The authority will not hesitate to bring offenders to court. Offenders may face a penalty of up to four times the amount of tax evaded. Jail terms may also be imposed.

GST Registration
All businesses, including individuals deriving income from their trade, profession or vocation, should closely monitor their income on a calendar year basis to assess if they need to register for GST. If their 12-month taxable turnover has exceeded $1 million at the end of the calendar year, they will be required to apply for GST registration within 30 days.

Any business that fails to register for GST is still required to pay GST on all their past transactions from the date the business became liable for GST registration. GST is payable even if the amount was not collected from customers. In addition, failure to register for GST is an offence and businesses may be required to pay 10% of GST due as a penalty, and fined up to $10,000.

Cash Rewards for Informants

A reward based on 15% of the tax recovered, capped at $100,000, would 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.

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]

Inland Revenue Authority of Singapore