16 Jul 2021

Goh Kim Teck ("Goh"), a 58-year-old precedent partner of Century 21st Night Club ("C21") has been sentenced by the Court to 3 weeks of imprisonment and ordered to pay fines and penalties totalling $347,920 after being convicted of  evading personal Income Tax and for omitting Goods and Services Tax (GST) collected from sales (output tax) in C21’s GST returns. 

As a precedent partner, Goh supervised C21’s daily operations and bookkeeping matters. He had deliberately omitted the cash sales of flower garlands in C21’s accounts in order to reduce the profits of C21 for tax reporting. As a result, he reported in his Income Tax returns for Year of Assessment (YA) 2013 that his total partnership income from C21 was a trading loss of $57,812, when it should have been a profit of $128,772, resulting in $16,519 in tax undercharged. 

Goh was also convicted of six charges involving the omission of $144,931 in output tax from C21’s quarterly GST returns between 2013 and 2014. 

Court Sentences (Proceeded Charges) 

For the one proceeded Income Tax charge of making a false entry in his Income Tax return with wilful intent to evade tax, the Court sentenced him to 3 weeks’ imprisonment and ordered to pay mandatory financial penalty of$49,557, which is three times the amount of Income Tax evaded. There were three other similar Income Tax charges taken into consideration for the purpose of sentencing. 

For the six proceeded charges on GST offences of understating output tax without reasonable excuse in his business’s GST returns, the Court ordered Goh to pay a fine of $8,500 and a mandatory financial penalty of $289,863, which is two times the amount of output tax understated. There were six other similar GST charges taken into consideration for the purpose of sentencing.

Enhanced Sentencing Framework for Tax Evasion 

With the endorsement of the enhanced sentencing framework for tax evasion by the High Court on 9 June 2021, offenders will face a stiffer imprisonment sentence which takes into account the harm caused by the offender and his or her culpability, such as the quantum of tax evaded, the degree of planning and premeditation and sustained period of offending. The imprisonment term imposed for tax evasion under Section 96 of the Income Tax Act may span the full range of up to three years.

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. Penalties for tax evasion can be up to four times the amount of tax evaded. Jail terms may also be imposed. Any business that gives incorrect information in its GST registration form or return without reasonable excuse may be liable to a penalty that is twice the amount of tax undercharged. A fine and/or a jail term 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: [email protected]

Cash Rewards for Informants 

A reward based on 15% of the tax recovered, capped at $100,000, will 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