Mr Neo Tian Teo, the sole proprietor of Everrise Traditional Healthway Services (“ETHS”), was charged in court for wilfully evading tax by under-declaring his income from ETHS. The total amount under-declared was $125,095 for the Years of Assessment (YA) 1997, 1999, 2000 to 2002 and 2005.

Modus Operandi

ETHS is in the businesss of providing health massage services. Neo Tian Teo understated the revenue figures, and consequently a lower amount of net profits in the ETHS’ statement of accounts (SOA) that he submitted to IRAS. He had knowingly falsified the SOA not once but for 6 years of assessments.

Court Sentences

Neo Tian Teo pleaded guilty to 2 charges of tax evasion for understating his income from ETHS. His sentences are as follows:

1. Sentenced to 2 weeks imprisonment for the 1st charge, 2 weeks imprisonment for the 2nd charge, sentences to run concurrently. The other 4 charges were taken into consideration.
2. Ordered to pay a penalty of 3 times the amount of tax undercharged of $6,297.33 in respect of the 2 charges, which amounted to $18,891.99. In default of payment of the penalty, the default sentence would be 1 week of imprisonment for the 1st charge and 1 week of imprisonment for the 2nd charge.

Voluntary Disclosure

Taxpayers are encouraged to conduct periodic reviews of their income tax returns/declarations and disclose any error voluntarily. While IRAS believes the majority of taxpayers are compliant, some taxpayers could have been negligent or unaware of their tax obligations, thus resulting in mistakes. To encourage taxpayers to disclose errors or omissions and to come forward voluntarily in a timely manner, IRAS has reduced the penalty under its Voluntary Disclosure Programme for voluntary disclosures which meet qualifying conditions. The qualifying conditions and further details are listed in IRAS’ e-Tax Guide on “IRAS Voluntary Disclosure Programme” (PDF, 476KB).

Members of the Public May Report Malpractices

While IRAS believes the vast majority of taxpayers are law-abiding and contribute their fair share of taxes, strong deterrent action will be taken against those who wilfully understate their income, even if the amount evaded is small. Those who assist others to defraud the government by falsifying records that result in under-declaration of income will also be penalised.

Taxpayers who wish to disclose errors made by them in their past income tax returns or anyone who wishes to report malpractices that might indicate tax evasion may write to IRAS at the following addresses:

Address: Investigation & Forensics Division, 55 Newton Road, Singapore 307987

IRAS will ensure that the identities of informants are kept confidential.

Issued by Inland Revenue Authority of Singapore