One IT Distribution Pte Ltd (“One IT”) and its director, Alan Ang Soon Teck (“Alan Ang”), have been convicted of assisting Chuan Huat Electronics Pte Ltd (“Chuan Huat Electronics”) to obtain a higher amount of Productivity and Innovation Credit (“PIC”) cash payout which Chuan Huat Electronics was not entitled to. Chuan Huat Electronics has also been convicted of giving false information in the PIC cash payout application form in order to obtain a PIC cash payout of $16,300.20.
Facts of the Case
Investigations revealed that Alan Ang, the director of One IT, a retailer in computer hardware and software, had instructed his staff to prepare a false sales invoice of $27,167 to Chuan Huat Electronics when there was no such sale transaction. Chuan Huat Electronics is in the business of repairing domestic electrical/electronic appliances. With wilful intent to obtain a higher amount of PIC cash payout, Chuan Huat Electronics stated in its PIC cash payout application form in Nov 2012 that it had incurred the purchases of PIC automation equipment amounting to $27,167. Based on that, Chuan Huat Electronics wrongfully obtained a PIC cash payout of $16,300.20.
Chuan Huat Electronics was convicted of giving false information to the Comptroller of Income Tax to obtain the PIC cash payout, which it was not entitled to. The court ordered the company to pay a penalty of $48,900.60, which is three times the amount of the PIC cash payout that it had wrongfully obtained, and a fine of $4,000.
One IT was convicted of wilful intent to assist Chuan Huat Electronics to obtain a PIC cash payout which Chuan Huat Electronics was not entitled to, by creating a false invoice. The court ordered the company to pay a penalty of $65,200.80, which is fourtimes the amount of PIC cash payout that Chuan Huat Electronics had wrongfully obtained, and a fine of $4,000.
Alan Ang, the director of One IT, was also convicted of wilful intent to assist Chuan Huat Electronics to obtain a PIC cash payout which Chuan Huat Electronics was not entitled to, by authorising the preparation of a false invoice. The court sentenced him to 12 days in jail and a penalty of $65,200.80, which is four times the amount of PIC cash payout that Chuan Huat Electronics had wrongfully obtained.
Four other companies linked to Alan Ang (Vital Computer Group Pte Ltd, Cheapskates Pte Ltd, Vital Repair & Parts Pte Ltd and PC Geeks Pte Ltd) have also been dealt with separately by IRAS for making false PIC claims. In the four cases, IRAS imposed composition fees amounting to $108,825.60, which is two times the amount of false PIC claims.
Severe Penalties for Abusing PIC Scheme
IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the Government. Offenders convicted of PIC abuse will have to pay a penalty of up to four times the amount of PIC cash payout fraudulently obtained or which would have been obtained if the offence had not been detected, and a fine of up to $50,000 and/or imprisonment of up to five 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 or wish to report malpractices or potential abuses of the PIC scheme can write to:
Inland Revenue Authority of Singapore
Investigation & Forensics Division
55 Newton Road, Revenue House
Email: [email protected]