Mr Chng Chor Tong, 51 years old, was charged and convicted this morning of three charges of wilfully with intent to evade tax, making false entries in his income tax returns for the Years of Assessment 1995, 2001 and 2002 with respect to his income from his sole-proprietorship, C T Chng & Co. The total amount of income under-reported was $152,275. Mr Chng Chor Tong is the first practising certified public accountant (CPA) in Singapore to be convicted for tax evasion.
Mr Chng Chor Tong is a CPA practising in his sole-proprietorship under the business name, CT Chng & Co. The services rendered by CT Chng & Co. include auditing, accounting, tax advisory and business consultancy.
Investigations revealed that Mr Chng Chor Tong was fully aware of the amount of business takings from his sole-proprietorship and had deliberately underreported his income in his income tax returns over several years. This case serves to remind taxpayers that IRAS can bring a person to court for a tax evasion offence regardless of the number of years that has passed. There is no limit to the number of past years that IRAS can charge for tax evasion offences committed.
Court Sentences for Mr Chng Chor Tong
Mr Chng Chor Tong was first charged in court on 1st August 2008 for 11counts of tax evasion for making false entries in his income tax returns. He was found to have under-reported income totalling $2,438,325 for the Years of Assessment 1995 to 2005 from his professional practice, C T Chng & Co.
This morning, Mr Chng Chor Tong pleaded guilty to 3 of the 11 charges. His sentences are as follows :
- Sentenced him to 4 months’ imprisonment for the 1st charge, 2 weeks’ imprisonment for the 2nd charge and 2 months' imprisonment for the 3rd charge, with sentences for 1st and 3rd charges to run consecutively. Total imprisonment is 6 months.
- Ordered him to pay a penalty of 3 times the amount of tax undercharged of $25,066.84 in respect of the 3 charges, which amounted to $75,200.52. In default of payment of the penalty, the default sentence would be 2 months of imprisonment for the 1st charge, 3 weeks of imprisonment for the 2nd charge, and 1 month of imprisonment for the 3rd charge.
Mr Chng Chor Tong was given a discharge not amounting to an acquittal on 3 charges relating to the Years of Assessment 2003 to 2005. The Comptroller of Income Tax withdrew the remaining 5 charges and compounded these offences for $944,681.73.
Errant Tax Agents
IRAS takes a serious view of such offences by errant tax agents. Tax agents, especially accountants have an extensive knowledge and understanding of the Singapore tax system and are expected to be compliant with their own tax reporting obligations.
IRAS also views tax agents as key partners in helping taxpayers fulfil their tax obligations and should provide tax advice in accordance to tax laws. Majority of them perform their duties ethically and professionally. IRAS will take harsh actions against those who deliberately facilitate clients in under-declaring their tax or exploiting grey areas in the existing legal and administrative tax system.
Besides taking errant tax agents to task, their clients’ tax affairs will also be closely examined by IRAS. Our investigations had revealed Mr Chng Chor Tong’s involvement in a separate tax evasion case. Arising from this, Mr Chng Chor Tong has paid $200,000 for compounding his offence in abetting one of his clients in the commission of a tax offence.
First company to be convicted under Serious Fraudulent Tax Evasion Provision
In a separate case, a corporate secretarial and bookkeeping company, OT Corporate Services Pte Ltd (“OTCSPL”) was found guilty of committing 2 offences:
- omitting income of $172,490 from its income tax return for the Year of Assessment 2006, and
- maintaining a false record for subcontractor expenses amounting to $240,000 for the Year of Assessment 2006.
OTCSPL is the first company to be charged and convicted under Section 96A. Section 96A was enacted in 2003 to deter serious tax evasion such as preparation or maintenance of false books of accounts or other records, and carries a heavy penalty of 4 times the amount of tax evaded.
OTCSPL was sentenced to a fine of $5,000 for the first charge of omitting income from its income tax return and ordered to pay a penalty of three times the amount of tax undercharged amounting to $64,403.76. For the second charge of maintaining a false record for subcontractor expenses, OTCSPL was sentenced to a fine of $10,000 and ordered to pay a penalty of four times the amount of tax undercharged amounting to $191,925.92.
Reporting of malpractices
Taxpayers are encouraged to review and disclose errors made in their declarations voluntarily. To encourage voluntary compliance, IRAS will impose lower penalties for errors disclosed voluntarily by taxpayers. Any member of the public who would like to report malpractices of others that might indicate tax evasion can also contact IRAS. We would ensure that the identities of informants are kept confidential.
Taxpayers who wish to disclose any errors made in their declarations or to report malpractices of others should write to:
Address: Investigation & Forensics Division,
55 Newton Road,
Issued by the Inland Revenue Authority of Singapore