24 Sep 2021

Yew Chay Hwa (“Yew”), 58, and Tiong Keng Kong (“Tiong”), 56, managers of Luxuriant Furnishing Design Pte Ltd (“LFDPL”), were convicted and sentenced in Court on 23 Sep 2021, for abetting LFDPL to give false information to the Comptroller of Income Tax in its Productivity and Innovation Credit (PIC) cash payout application forms in order to obtain PIC cash payouts amounting to $111,360, which the company was not entitled to. Both Yew and Tiong are linked to the case of Ng Cheow Chai (“Ng”), director of SMS Machinery (S) Pte Ltd, who was the mastermind behind this PIC scam. Ng was sentenced to 46 months’ imprisonment and ordered to pay $5.75 million in penalties in April 2020.

Both Yew and Tiong conspired with Ng to abuse the PIC scheme by submitting false PIC claims to IRAS for the Years of Assessment (YA) 2016 and 2017. They jointly authorised their administrative manager to declare in the PIC cash payout application forms that LFDPL had incurred a total of $187,600 in qualifying PIC expenditure for the purchase of the new machines from SMS Machinery (S) Pte Ltd, where in fact there were no such purchases. Moreover, to avoid detection, Yew and Tiong also authorised a circuitous flow of funds between LFDPL and Ng’s entities as well as the issuance of false invoices under LFDPL, to falsely portray that there were genuine transactions between LFDPL and Ng’s entities, including the alleged purchases of machines from SMS Machinery (S) Pte Ltd.

Court Sentences
Yew and Tiong each pleaded guilty in respect of their two charges under Section 37J(3) of the Income Tax Act read with Section 109 of the Penal Code for abetting LFDPL to, with wilful intent, submit false information to the Comptroller of Income Tax in order to obtain PIC cash payouts which the company was not entitled to.

They were each sentenced by the Court to 6 weeks of imprisonment. The Court also ordered each of them to pay a mandatory financial penalty of $334,080, which is three times the amount of the PIC cash payout that had been/ would have been wrongfully obtained Their respective remaining charges were being taken into consideration for the purposes of sentencing.

Severe Penalties for Abusing the PIC Scheme
IRAS takes a serious view of any attempt by claimants, vendors or consultants to defraud the government. Offenders convicted of abusing the PIC scheme may be ordered to pay a penalty of up to four times the amount of cash payout fraudulently obtained, 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 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 Informant 
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