A former professional electrical engineer, Ng Hai Hock, 54, who owned a sole proprietorship, NHH Consultants, was sentenced to 6 weeks’ imprisonment and ordered to pay fines and penalties totaling $180,105.37 after being found guilty of evading income taxes as well as failing to register for Goods and Services Tax (“GST”). In addition, Ng is required to pay a total of $533,504.25 in back-dated taxes to IRAS.

Ng faced four charges of evading income taxes for Years of Assessment (“YAs”) 2008 to 2010 and 2012, as well as one charge for failing to file his income tax returns for YA 2011. These five offences had resulted in Ng failing to account for $80,399.01 in income taxes to IRAS.

In addition, Ng faced one charge for failing to register for GST between 1 March 2008 and 31 December 2011, which had resulted in Ng failing to account for GST totalling $453,105.24.

Court Sentences (Proceeded Charges)

For the two proceeded charges on income tax evasion, Ng was sentenced to 6 weeks’ imprisonment. In addition, the Court ordered Ng to pay a penalty of $129,794.85, which is three times the amount of income taxes evaded.

For failure to register for GST, the Court fined Ng $5,000 and ordered him to pay a penalty of $45,310.52, a sum that is 10% of GST due. 

IRAS' audit programme uncovered the offence

IRAS runs regular audit programmes across various industries to ensure tax compliance among businesses. 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.

Investigations revealed that in 2007, Ng was liable to notify the Comptroller of GST of his liability to register for GST by 30 Jan 2008. However, he failed to do so by the due date, thus failing to account for GST on taxable supplies provided by NHH Consultants.

Further investigations revealed that Ng had wilfully evaded taxes by omitting to declare the income earned by him from NHH Consultants in his income tax returns for YAs 2008, 2009, 2010 and 2012.

Ng had also failed to file his income tax returns for YA 2011. Ng was issued a No-Filing Service (NFS) letter for his YA 2011 tax return, which would exempt him from submitting an income tax return if (i) he only had auto-included employment income; and that (ii) he had the same relief claims as the previous year. As Ng had earned income in YA 2011 beyond what was auto-included and thus did not meet the conditions in the NFS letter, he was required to file an income tax return for YA 2011.

Penalties for Non-Compliance

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.

From 2019, businesses will only need to monitor their taxable turnovers on a calendar year basis. If their 12-month taxable turnover has exceeded $1 million at the end of the calendar year, they will be 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.

IRAS regularly conducts audits to identify businesses that fail to register for GST. Over the past three years, IRAS has audited 400 businesses that have failed to register for GST and recovered $53 million in GST and penalties.

Income Tax

IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who willfully evade tax. Taxpayers are ultimately responsible for the information declared in their income tax returns. IRAS 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.

Any person who fails or neglects without reasonable excuse to furnish a return of income shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000, and, in default of payment, imprisonment for a term of up to six months.

Reporting or Disclosure 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, reveal evaded taxes, or report malpractices that might indicate tax evasion, can write to:

Inland Revenue Authority of Singapore 
Investigation & Forensics Division
55 Newton Road, Revenue House
Singapore 307987 

Email: [email protected]

Cash Rewards for Informant

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

Inland Revenue Authority of Singapore