Two partners of a chemical treatment business were found guilty of evading tax. They were each sentenced to 2 weeks’ jail and ordered to pay penalty totaling $361,623.54.

Partners are taxed on their share of profits from the partnership. A partner is also required under the law to declare his/her share of partnership’s profits in his/her personal Income Tax return. Mdm Lim Seow Hong, 56, and Ms Zhu MinZi, 43, are partners of Advance Chemical Treatment, a business that provides electroplating service. They intentionally reported lower sales amounts in their Partnership Income Tax Returns and Statement of Accounts for Years of Assessment 2005 and 2006. The total sales amount under-declared was $669,258. Both of them also under-reported their share of the profits in their personal Income Tax returns for the Years of Assessment 2005 and 2006.

The court sentenced each of them to 2 weeks’ of imprisonment. The penalty for tax evasion is 3 times the amount of unpaid tax. Mdm Lim and Ms Zhu were therefore ordered to pay a penalty of $181,357.26 and $180,266.28 respectively. In default of payment, each of them would be sentenced to 12 months’ of imprisonment.

Taxpayers are encouraged to conduct periodic reviews of their income tax declarations and disclose any error voluntarily. While IRAS believes the vast majority of taxpayers are law-abiding and contribute their fair share of taxes, deterrent action will be taken against those who wilfully understate their income. Under-reporting of income is a serious offence. Those who assist others to falsify records that result in under-declaration of income will also be penalised. Besides penalties, the offence carries a jail term upon conviction.

In the spirit of encouraging voluntary compliance, IRAS imposes lower penalties for errors disclosed voluntarily by taxpayers. Taxpayers who wish to disclose errors in their Income Tax returns or report malpractices that might indicate tax evasion should email to [email protected] or write to:

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

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