Durian sellers convicted for evading $708,000 in income

6 May 2019

Business fined for failing to register for GST

Shui Poh Sing, a durian seller in the Ghim Moh area and managing partner of minimart businesses Shanghai Moh Lee Seng and Seng Chung Trading, and his business partner and brother, Shui Poh Chung were convicted of their tax offences in Court today for under-declaring their trading income by about $708,000 over a period of six years, and for failing to register for GST when their revenue exceeded $1m.

Court Sentences

Shui Poh Sing and Shui Poh Chung each faced six charges of evading income taxes for YAs 2007 to 2011 and 2014. Shui Poh Sing and Shui Poh Chung each pleaded guilty to two income tax charges, involving a total of $45,933 in taxes undercharged, with the remaining charges being taken into consideration for the purposes of sentencing.

In addition, Shui Poh Sing pleaded guilty to one charge for failure to register for GST, which involved $87,314 in taxes undercharged.

Shui Poh Chung was ordered to pay a total fine of $10,000 and a penalty of $46,303, which is two times the amount of taxes undercharged. The case for Shui Poh Sing has been adjourned to 7 May for sentencing.

Facts of the Case

Investigations revealed that the undeclared income earned from the sale of durians by Seng Chung Trading were used to finance the mortgage payments for the brothers’ respective properties in Malaysia.

Investigations also revealed that Shanghai Moh Lee Seng’s turnover crossed the $1 million threshold for GST registration on 31 December 2006. Under the GST Act, Shui Poh Sing was required to notify the Comptroller of GST of Shanghai Moh Lee Seng’s liability to register for GST by 31 January 2007. However, he failed to do so by the due date, thus failing to account for GST on taxable supplies provided by Shanghai Moh Lee Seng.

Penalties for Non-Compliance

Tax Evasion

IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who wilfully evade tax. Taxpayers are ultimately responsible for the information declared in their income tax returns. The authority will not hesitate to bring offenders to court. Penalties for tax evasion can be up to four times the amount of tax evaded. Jail terms may also be imposed.

GST Registration
All businesses, including individuals deriving income from their trade, profession or vocation, should closely monitor their income and regularly assess if they need to register for GST. If their past 12-month taxable turnover has exceeded $1 million at the end of any calendar quarter, they are required to apply for GST registration within 30 days.

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 businesses may be required to pay 10% of GST due as a penalty, and fined up to $10,000.

     

Reporting of Malpractices

Businesses or individuals are encouraged to immediately disclose any past tax mistakes. IRAS will treat such disclosures as mitigating factors when considering action to be taken. Those who wish to disclose past mistakes or report malpractices 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 Informants

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 payments are at the discretion of the Comptroller. IRAS will ensure that the identities of informants are kept strictly confidential.

 

Inland Revenue Authority of Singapore