Business and Management Consultancy Owner Convicted of PIC Fraud

15 Jul 2016

K H Raja Mohamad Bin Maiden ("K H Raja Mohamad"), the sole proprietor of Qaizar Consultancy, has been convicted of giving false information to the Comptroller of Income Tax in order to obtain a Productivity and Innovation Credit (PIC) cash payout of $59,332.80 for his business. The court ordered the sole proprietor to pay a penalty of $118,665.60 and a fine of $4,500. In default of paying the penalty and fine, K H Raja Mohamad will face 16 weeks and 2 weeks of imprisonment respectively. 

Backdating of Documents

K H Raja Mohamad made a PIC cash payout claim for the $98,888 expenditure that Qaizar Consultancy had purportedly incurred on the purchase of software in the Year of Assessment ("YA") 2013, for the qualifying financial period from Oct 2012 to Dec 2012.

IRAS’ investigations revealed that Qaizar Consultancy was registered with the Accounting and Corporate Regulatory Authority ("ACRA") on 10 Apr 2013, two days after the false PIC cash payout claim was made. K H Raja Mohamad had backdated the business commencement date in order to falsely qualify for the PIC cash payout claim. No business or trade had been conducted under Qaizar Consultancy.

In order to obtain the PIC cash payout, K H Raja Mohamad had agreed with the software vendor to backdate the software purchase invoice even when the business and expenditures were non-existent during the said qualifying financial period.

To make his claim appear legitimate, K H Raja Mohamad also backdated contributions to the CPF accounts of three individuals, in order to represent them as Qaizar Consultancy’s local employees when in fact they were not.

Court Sentences

K H Raja Mohamad was convicted of the charge that he, without reasonable excuse, gave false information to the Comptroller of Income Tax to obtain the PIC cash payout which he was not entitled to.

The court ordered K H Raja Mohamad to pay a penalty of $118,665.60, which is two times the amount of the PIC cash payout that would have been disbursed to Qaizar Consultancy if the false claim was not detected by IRAS. He was also ordered to pay a $4,500 fine.

Severe Penalties for Abusing PIC Scheme

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government. Offenders convicted of PIC abuse will have to pay a penalty of up to four times the amount of PIC cash payout fraudulently obtained or which would have been obtained if the offence had not been detected, and a fine of up to $50,000 and/or imprisonment of up to five years.

Reporting of Malpractices

Businesses or individuals are encouraged to immediately disclose any past mistakes. IRAS will treat such disclosures as mitigating factors when considering action to be taken. Those who wish to disclose past mistakes or wish to report malpractices or potential abuses of the PIC scheme can write to:

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

Inland Revenue Authority of Singapore