Sole-proprietor sentenced to 6 months’ jail and $996,236 in penalties for Income Tax and GST evasions

20 Mar 2020

Eddie Choy Hon Cheong ("Choy"), the 59-year-old sole proprietor of Cubitt Engineering ("CE"), a business that manufactures oil and gas equipment, was sentenced to a total of 6 months’ imprisonment and ordered to pay a total penalties of $996,236 after being found guilty of evading Income Tax and Goods and Services Tax (GST).

Choy was facing a total of 9 charges of evading $421,995 in Income Tax for Years of Assessment (YAs) 2008 to 2013, by inflating his business expenses and omitting business sales from his Income Tax returns.

In addition, he faced 21 charges of evading $33,698 in GST, by making false entries in his GST returns and not accounting for output tax sales made for the quarters ending June 2007 and March 2008 to December 2012.

Court Sentences

For the three proceeded charges on income tax evasion, Choy was sentenced to a jail term of 6 months (sentences to run consecutively) and ordered to pay a penalty of $929,575 which is three times the amount of tax undercharged.

For the seven proceeded charges on GST evasion, Choy was sentenced to a jail term of 14 weeks and 1 month (sentences to run concurrently with income tax offences) and ordered him to pay a penalty of $66,660, which is three times the amount of tax evaded. 


IRAS' audit programme uncovered the offence

IRAS runs regular audit programmes across various industries to ensure tax compliance among individuals, businesses and the self-employed. Using data analytics and advanced statistical tools, IRAS is able to cross-check data and detect anomalies. This case was uncovered through one such audit programme.

 

IRAS Warns Against Tax Evasion

IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who wilfully evade tax. The authority will not hesitate to bring offenders to court. Offenders may face a penalty of 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, 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.

 

Inland Revenue Authority of Singapore