What drives IRAS' investigators to crack tax crimes

Off duty, Ms Ameera Koh, Deputy Director at IRAS’ Investigation & Forensics Division, does not come across as a typical investigator. Her petite frame and easy-going outspoken demeanour belie her impressive track record which includes leading teams in simultaneous raids on five undertaker businesses in 2019.

Ameera is part of a team of tax investigators in IRAS which investigates tax crimes to ensure that errant taxpayers do not get away from paying their fair share of taxes, As a veteran investigator of 16 years, Ameera’s typical work day is anything but boring. She could be conducting interviews late into the night or visiting taxpayers at diverse business premises, industrial sites, or factories rarely seen by the general public.

Let’s hear it from Ameera, an IRAS investigator, on her investigations into one of her focus areas – the funeral industry. Unfiltered.

Why is the funeral industry at risk of tax non-compliance?

Ameera: Funeral parlours are usually managed by family members, and the majority of ownership lies within the family. Small businesses are observed to be at higher risk of tax non-compliance as they are often cash-based and family-run.

What are some features of such businesses?

Ameera: Using the funeral industry as an example, family-run and cash-based business practices are marked by:

• substantial cash transactions,
• poor record-keeping, and
• weak internal controls or processes.

This may result in these businesses filing incorrect income tax returns and failing to register for GST on time when their taxable turnover over a 12-month period exceeds $1 million.

What’s the most interesting thing which happened to you during the course of your work?

Ameera: It is fascinating how cash-based businesses get creative when it comes to keeping their money safe and away from the prying eyes of tax investigators.

The disciplined ones stash cash daily into Cash Deposit Machines while the old-timers stash wads of cash in biscuit tins or plastic bags “hidden” in plain sight in cupboards or cabinets. The most sophisticated ones have modern vaults which are high-tech safes which require key codes, passwords, and even thumbprints, to access.

We see all sorts in this business.

Beyond the funeral palours, did you also uncover issues in the wider funeral industry?

Ameera: I would say that there is graver business in the wider funeral industry which involves a web of related businesses which supply products and services to the undertakers. Although the undertaker or funeral parlour is the first point-of-contact for the client, many other services are provided by subcontractors.

When the client indicates preference for certain services beyond those directly provided by the undertaker, the undertaker will contact third-party service providers to provide the services. These include subcontractors who supply and install tentage, furniture and mobile toilets, embalming services, and food & beverage catering, and religious leaders or priests who perform religious rites for the funeral services. Amongst these third-party service providers, religious practitioners also pose tax compliance risks.

How does IRAS help businesses with tax compliance and tackle tax fraud?

Ameera: As part of our continuous efforts to tackle tax fraud and underpayment, IRAS conducts investigations and compliance programmes. In FY 2023/24, we audited and investigated 9,590 taxpayers, and recovered more than $857 million in taxes and penalties. New AI applications have also been developed to enhance our audit and fraud detection capabilities.

Besides investigations, IRAS conducts outreach programmes either through in-person sessions or online via e-Tax guides to share best practices with businesses.

IRAS also encourages businesses to adopt accounting software that meets IRAS' requirements, to assist them in complying with tax obligations. For a list of IRAS-compliant accounting software, refer to IRAS' Accounting Software Register Plus (ASR+).