Sole proprietor of funeral business to pay penalty of more than $250,000 for making false entries in GST registration form and income tax return

7 Mar 2019

Quek Soo Chek William (“Quek”), a 60-year-old sole proprietor of Union Casket, a business that provides funeral and funeral-related services, was ordered to pay fines and penalties totalling $256,976 after being found guilty for giving incorrect information in his Goods and Services Tax (“GST”) registration form and for submitting an incorrect income tax return. This is IRAS’ first prosecution case against a member of the funeral industry.

Quek was convicted of (a) one charge for giving incorrect information in his GST registration form without reasonable excuse and (b) one charge of submitting an incorrect income tax return for Year of Assessment (“YA”) 2011 without reasonable excuse.

Apart from fines and penalties, Quek is also required to pay $132,382 in back-dated taxes to IRAS.


Court Sentences (Proceeded Charges)

For giving incorrect information in his GST registration form without reasonable excuse, Quek was sentenced to a penalty of $246,707, which is double the amount of taxes undercharged. In addition, he was fined $3,000.

For the submitting an incorrect income tax return without reasonable excuse, the Court ordered Quek to pay a penalty of $6,268, which is double the amount of taxes undercharged. He was also fined $1,000.

   

Facts of the Case

Quek applied to register Union Casket for GST on 10 February 2006. Without reasonable excuse, Quek gave incorrect information in the GST application form stating that Union Casket’s taxable supplies exceeded $1 million in the quarter ending December 2005 when in actual fact, they exceeded the $1 million threshold in December 2002.

Investigations also revealed that Quek had incorrectly included private car expenses as part of his deductible expenses in his income tax return for YA 2011 to lower his tax liability.


Penalties for Non-Compliance

Giving Incorrect Information

Any business that gives incorrect information in its GST registration form or return without reasonable excuse may be liable to a penalty that is twice the amount of tax undercharged. A fine and/or a jail term may also be imposed.

Incorrect Claims on Private Expenses

Although S-plated cars may be purchased by a business for business use, the running expenses incurred on these cars are not allowable as tax deductions. Running expenses that are not deductible for tax include parking fees, car insurance, repair and maintenance, as well as petrol costs.

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 income tax evasion can be up to four times the amount of tax evaded. Jail terms may also be imposed.

     

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