Summary
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A 61-year-old businessman was sentenced to 14 months’ jail and ordered to pay S$1,426,808 for tax offences.
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Pang Chuan Wah directed his son to submit false income figures and conceal the business’s GST registration liability.
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The offences caused S$351,787 in income tax to be undercharged.
SINGAPORE: A 61-year-old businessman has been jailed for 14 months after directing his son to evade income tax and GST.
Pang Chuan Wah was also ordered to pay a S$1,426,808 penalty for offences linked to K.B. Luxury Watch and Jewellery.
The business was registered under his son’s name, but Pang managed its operations and tax matters. He then instructed his son to provide false information to the Inland Revenue Authority of Singapore (IRAS).
The case is the first prosecution involving a business in Singapore’s pre-owned luxury watch trade, IRAS reported (Sept 7).
False income figures led to more than S$350,000 in tax being undercharged
For Years of Assessment 2018 to 2020, Pang reported lower income figures for his business to his son.
Those figures were used in the son’s individual income tax returns. This resulted in S$351,787.20 in income tax being undercharged.
The case shows how tax offences can involve more than the person whose name appears on business records. Pang was found to have directed the tax reporting, despite the sole proprietorship being registered in his son’s name.
Watch sales exceeded S$10 million, but GST registration was concealed
Pang also directed his son to conceal the business’s need to register for GST. The business had crossed the S$1 million GST registration threshold. Its actual sales exceeded S$10 million, Channel NewsAsia (CNA) reported (Sept 7).
However, the sales were reported at about S$920,000, keeping them below the registration threshold. This resulted in S$108,619.81 in GST being undercharged between Jun 1, 2017 and Dec 30, 2018.
A separate false GST return caused another S$15,195.83 to be undercharged between Apr 1 and Jun 30, 2019.
IRAS says serious tax offences can bring jail
IRAS said people who deliberately evade tax can face penalties of up to four times the tax evaded, along with jail. Businesses must monitor their turnover and register for GST when required.
A business that fails to register can still be required to pay GST on past transactions. It can also face penalties and fines.
The tax authority said businesses and individuals should disclose past mistakes, with voluntary disclosure treated as a mitigating factor.
IRAS also offers rewards to informants whose information leads to tax recovery, with payments capped at S$100,000.
For Singapore businesses, keeping proper records and declaring taxes correctly is far cheaper than trying to hide sales.
Read more: Chinese national man, 47, gets S$560K fine in Singapore for evading over S$60K in customs duty on more than 28K bottles of duty-unpaid beer
