Tuition centre penalised for failing to register for GST

17 May 2019

Company directors admitted to omitting their salary income to evade income tax

Ideas Ink School Pte Ltd (“Ideas Ink School”), a tuition centre, and its two company directors, Pek Kim Beng and Pek Kim Yew, were convicted for tax offences.

Ideas Ink School was sentenced to a penalty of $7,645 and a fine of $2,000 for failing to register for GST by 30 Jul 2012 when its taxable supplies had exceeded $1 million by the quarter ending Jun 2012.

Both directors were convicted for making incorrect returns by understating income in their tax returns. The court sentenced the two directors to pay penalties that were two times the amount of tax undercharged. Pek Kim Beng has to pay a penalty of $95,584 and a fine of $6,000 on the two proceeded charges, with two other charges being taken into consideration for the purpose of sentencing. On the other hand, Pek Kim Yew has to pay a penalty of $14,831 and a fine of $2,000 on the two proceeded charges, with the two other charges being taken into consideration for the purpose of sentencing.

Chee Mee Yen, Ideas Ink School’s bookkeeper and mother of the company directors, is also facing charges for abetting the centre and its directors in evading tax. The court proceedings pertaining to Chee Mee Yen are still ongoing.

Penalties for Non-Compliance

GST

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

Income Tax

IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who wilfully evade tax. Taxpayers are 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. In certain situations, jail terms may also be imposed.

Cash Rewards for Informants

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 will ensure that the identities of informants are kept strictly confidential.

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

Inland Revenue Authority of Singapore