51-year-old Quek Ban Tong Edmund (“Quek”), the precedent partner of Economics Café Learning Centre (“ECLC”), was sentenced to five weeks’ jail and ordered to pay penalties of $72,770.79 for evading $24,256.93 in Income Tax.  

Quek carried on the business of conducting individual and group tuition in economics. He also engaged in the sale of economics textbooks to his students. Investigations revealed that Quek under-reported the sales and net profits of ECLC in its Partnership Income Tax return (Form P) for Year of Assessment (YA) 2020 by omitting sales revenue from individual tuition and the sale of economic textbooks. Quek’s share of the ECLC partnership profits was also under-reported in his personal Income Tax returns for YA 2020 (Form B).

The total amount of trade income omitted by Quek was $150,867.00, resulting in $24,256.93 of Income Tax undercharged.

IRAS’ audit programme uncovered the offence

Prior to his conviction, Quek was audited by IRAS in 2016 and placed under IRAS’ Post Compliance Surveillance (“PCS”) Programme. He was supposed to make improvements in his income tax reporting and record-keeping. During IRAS’ PCS Programme audit in 2020, IRAS detected that Quek had wilfully evaded taxes. He is the second recalcitrant taxpayer under the PCS Programme to be prosecuted by IRAS.

IRAS conducts audits on taxpayers using a risk-based approach. Taxpayers who pose a higher risk of non-compliance are subjected to more frequent monitoring and reviews. Those under audit may be placed under the PCS Programme for periodic review to ensure that they adopt accurate tax reporting practices.

IRAS reminds self-employed persons not to take tax reporting lightly and to put in place proper systems and procedures to keep records of their business income and expenses. Self-employed persons are encouraged to digitise their record keeping so that the income earned and the expenses claimed can be more readily tracked. To help businesses digitise their record keeping, IRAS has worked with accounting software developers to make available a list of accounting software that meets IRAS’ requirements. For more information, please refer to IRAS’ Accounting Software Register.

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.

IRAS’ audit programme uncovered the offence IRAS runs regular audit programmes across various industries to ensure tax compliance among individuals, businesses and the self-employed.

Keeping Proper Records

IRAS would like to remind all taxable persons to keep proper records and accounts of all their taxable transactions. Records pertaining to income tax must be retained for a period of 5 years from the relevant YA, while records pertaining to GST must be retained for a period of not less than 5 years from the prescribed accounting period. Those who fail to do so may be liable on conviction to a fine and/or a jail term.

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 actions to be taken. Please refer to the IRAS website for more information on how to disclose past mistakes. Those who wish to report malpractices may make their submissions via this form.

Cash Rewards for Informants

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