Veteran undertaker convicted of Income Tax and Goods & Services Tax offences
77-year-old Tay Hai Choon (“Roland Tay”) has been sentenced by the court and ordered to pay a total fine of $12,000 (in default 12 weeks’ imprisonment) and penalty of $529,321.28 (in default 32 months’ imprisonment) after being convicted of offences involving the making of incorrect personal income tax returns and the failure to register for Goods & Services Tax (“GST”).
The breakdown of the offences and sentencing details are:
| Offence | Charges | Sentencing details |
|---|---|---|
| Making incorrect income tax returns for Years of Assessment (“YAs”) 2011 to 2013 | 3 charges under section 95(2)(a) of the Income Tax Act (Cap 134, 2008 Rev Ed) | $9000 fine (in default 9 weeks’ imprisonment) and $500,624.98 mandatory penalty (in default 30 months’ imprisonment) |
| Failure to notify the Comptroller of GST of his liability to be registered for GST purposes | 1 charge under section 61(a) of the GST Act (Cap 117, 2005 Rev Ed) | $3000 fine (in default 3 weeks’ imprisonment) and $28,696.30 mandatory penalty (in default 2 months’ imprisonment) |
| Total | $12,000 fine and $529,321.28 mandatory penalty (total in default 32 months’ and 12 weeks’ imprisonment) | |
At the material times, Roland Tay was a partner of Direct Singapore Funeral Services & Embalming (“DSFSE”) and also the sole proprietor of several other businesses: namely, Hindu Casket (“HC”), Tong Aik Undertaker (“TAU”), All Saints Care Services (“ASCS”), 24 Hours Direct Casket (“24H”) and Defu Veterinary Clinic (“DVC”).
Investigations revealed that Roland Tay had, without reasonable excuse, made incorrect returns for YAs 2011 to 2013, resulting in a total income of $250,312.49 tax being undercharged. The income and expenses of DSFSE, HC and TAU were not fully reported for YAs 2011to 2013. Additionally, the returns also did not account for the profits that Roland Tay made from ASCS (for YA 2011) and 24H (for YA 2012). Losses of DVC (for YA 2013) were also not reported.
Investigations also revealed that Roland Tay failed to register for GST when the total value of the taxable supplies of DSFSE, HC and TAU exceeded $1 million for 4 consecutive quarters. The total net GST due arising from the failure to register for GST was $286,962.97 from the quarter ended 31 December 2010 to the quarter ended 30 September 2013.
IRAS’ audit programme uncovered the offences
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 end of the prescribed accounting period. Those who fail to do so may be liable on conviction to a fine and/or jail term, where applicable.
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 by 30 January. They will then be registered for GST purposes with effect from 1 March. Additionally, if at any point in time, they can reasonably expect their taxable turnover to be more than $1 million in the next 12 months, they must register for GST within 30 days from the date of their forecast. They will be registered on the 31st day from the forecast date.
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 on conviction, businesses will be required to pay 10% of the GST due as a penalty, and may be fined up to $10,000.
Voluntary disclosure for reduced penalties
Businesses or individuals are encouraged to immediately disclose any past tax mistakes. IRAS will treat such voluntary 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.
Cash rewards for informants
Those who wish to report tax-related malpractices to IRAS may do so via this form. 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 reward payments are made solely at IRAS’ discretion. IRAS will ensure that the identities of informants are kept strictly confidential. Please refer to the IRAS website for more information on reporting tax malpractices.
Inland Revenue Authority of Singapore