We refer to Mr Ang Ah Lay’s letter ‘Iras should account for system’s failure to detect cheating’ published in ST Forum on 18 January 2022.
Any scheme that supports a broad base of business needs to strike a judicious balance between facilitating genuine businesses to get grants quickly and conveniently, and comprehensive checks to prevent fraud perpetrated by a minority of applicants. This is what IRAS aimed to do in the administration of the Productivity and Innovation Credit (PIC) scheme.
IRAS instituted upfront checks and used data analytics to detect and identify risky cases for review. About 20% of the PIC applications had their grants either reduced or rejected due to such checks. But no upfront checks can uncover all fraudulent applications without being too onerous. This is thus complemented by ex post audits and investigations, including cases surfaced through whistle-blowers, to recover PIC grants and hold offenders accountable. As at 31 Dec 2021, IRAS has prosecuted more than 60 cases of fraudulent PIC claims.
Mr Lim Chit Foo set up multiple shell companies through nominee directors in an elaborate scheme to defraud the Government on the PIC payments. A number of these companies were flagged by IRAS’ systems as risky for review, and subsequent investigation led to the discovery of all related cases.
IRAS is committed to safeguarding public revenue, and regularly reviews our anti-gaming framework to ensure that the risk parameters and checks stay relevant. We will not hesitate to take legal actions against those who abuse and cheat public funds.
We thank Mr Ang for the opportunity to clarify.
Kelly Wee (Ms)
Director (Corporate Communications)
Inland Revenue Authority of Singapore