S Chandran (“Chandran”), a 40-year-old sole-proprietor of Paradize Consultancy, was charged on 27 Jan 2017 with 58 counts of assisting 49 individuals in submitting a total of 58 fraudulent claims for Productivity and Innovation Credit (“PIC”) cash payouts and bonuses amounting to a total of $1,122,744. After 19 days of trial, the Court has found Chandran guilty of the first 3 charges proceeded by the Prosecution.

Chandran was convicted of the 3 charges for assisting three claimants to make fraudulent claims to IRAS in order to obtain $73,818 of PIC cash payouts they were not entitled to. The Court sentenced Chandran to 36 months’ jail and ordered to pay a penalty of $295,272 (in default 30 weeks’ imprisonment). The remaining 55 charges would be dealt with at a later date.

Facts of the case

Chandran orchestrated this elaborate PIC scam by holding himself out as a PIC consultant. Chandran would then organise both individual and mass presentation sessions for interested persons to convince them to undertake this PIC scam.

Chandran facilitated bogus PIC claims for these people by providing false documentation to support the expenditures declared in the claimants’ PIC applications, and falsely represented to IRAS that the claimants met the prerequisite of three local employees. In fact, no such expenditure was incurred and these claimants did not have three local employees. Based on the representations stated in the PIC application form, IRAS disbursed monies to the claimants. Upon a successful claim on these fabricated expenditures, Chandran would receive 50% of the PIC monies disbursed.

Subsequently, when IRAS audited these fraudulent claims, Chandran provided template responses to the claimants to handle queries from IRAS in a bid to cover up this PIC scam. Upon uncovering the fraud after investigation, IRAS prosecuted Chandran for 58 counts of the offence under section 37J(4)(b) of the Income Tax Act. 

Severe Penalties for PIC Abuse

IRAS takes a serious view of any attempt by claimants, vendors or promoters to abuse the PIC scheme and defraud the Government. In particular, IRAS will take stern action against promoters who facilitate offences committed against the PIC schemes. Offenders are liable to penalties of up to four times the amount of PIC Cash Payout and PIC Bonus fraudulently obtained, and a fine of up to $50,000 or imprisonment of up to five years.

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