Director Behind PIC Sham Convicted

20 Jul 2017

Selladorai Dharmalingam (“Selladorai”), sole director of Al Bright Construction Pte. Ltd. (“Al Bright”), has been convicted and sentenced for abusing the Productivity and Innovation Credit (PIC) scheme by giving false information to illegally obtain a PIC cash payout and bonus for Al Bright. The court ordered Selladorai to pay a fine of $3,500 and a penalty of $100,922.40, twice the amount of cash payout that was illegally obtained, and sentenced him to 12 weeks’ imprisonment in default of payment.

Case Facts

Selladorai is the sole director of Al Bright, a company engaged in the general construction business. Selladorai authorised the submission of the PIC Cash Payout Application Form by Al Bright to claim $50,461.20 in PIC cash payout and $15,000 in PIC bonus, for the purported expenditure of $84,102 to purchase an electric overhead crane.

Investigations revealed that no such expenditure had been incurred by Al Bright nor had any such equipment been purchased. Yet, Al Bright went on to falsely declare the purchase of the said equipment in its submission to IRAS under the PIC scheme on the basis that it had incurred the cash purchase. Selladorai thus committed an offence for he had given false information with the aim for Al Bright to illegally obtain a PIC cash payout and PIC bonus for the Year of Assessment 2015.

Court Sentence

Selladorai was convicted of giving false information to the Comptroller of Income Tax in order to obtain a PIC cash payout and PIC bonus which the company Al Bright was not entitled to. The court ordered Selladorai to pay a fine of $3,500 and a penalty of $100,922.40, twice the amount of PIC cash payout that Al Bright had wrongfully obtained, and sentenced him to 12 weeks’ imprisonment in default of payment.

Severe Penalties for Abusing the PIC Scheme

IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government. Offenders convicted of PIC fraud will have to pay a penalty of up to four times the amount of 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

Email: ifd@iras.gov.sg

Cash Rewards for Informant

A reward based on 15% of the tax recovered, capped at $100,000, would be given to informants if the information and/or documents provided lead to a recovery of tax that would have otherwise been lost. All payments are at the discretion of the Comptroller. IRAS would ensure that the identities of informants are kept strictly confidential.

Inland Revenue Authority of Singapore