Tan Wan Wen, who masterminded a plan to defraud the Comptroller of Goods and Services Tax (“GST”) of GST refunds by using multiple shell businesses, was sentenced to 8 weeks in jail. She was also ordered to pay a penalty of $55,141.17, three times the amount of GST refunds that were fraudulently claimed.
IRAS Auditors Detected the Fraudulent GST Refund Claims
During the course of audit, IRAS’ auditors observed peculiarities in the GST refund claims made by several businesses. IRAS’ auditors also discovered that these businesses that were registered under different individuals’ names were connected to Tan Wan Wen.
Tan Wan Wen had made use of the names of several acquaintances and her husband to set up various shell businesses with the intention of defrauding the government of the GST refund. These businesses are Alco Industrial Supplies Pte Ltd, Eltronic Marketing Pte Ltd, Newmart Trading & Services and Raco Industrial Supply. Our investigation officers uncovered that fictitious or “paper” transactions were carried out between these businesses. Tan Wan Wen then assisted these shell businesses to make false declarations on their respective GST returns in 2008. Through these shell businesses, she had fraudulently claimed a total amount of $18,380.39 in GST refund.
Tan Wen Wen pleaded guilty to three charges while the remaining four charges were taken into consideration for the purpose of sentencing. She was sentenced to 8 weeks in jail and ordered to pay a penalty of $55,141.17, three times the amount of GST refund fraudulently claimed.
Severe Penalties for Fraudulent GST Claims
It is a serious offence to claim GST input tax on fictitious purchases or understate output tax on sales. Offenders face a penalty of up to three times the amount of tax undercharged, a fine not exceeding $10,000, and/or imprisonment of up to seven years.
Reporting of Malpractices
Businesses or individuals are encouraged to immediately disclose any past 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
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.