THE tax authorities here keep a close watch for tell-tale signs of dodgy claims under the Productivity and Innovation Credit (PIC) scheme.
Suspicious applications strongly indicating illegitimate claims will be rejected upfront unless the businesses can prove they have met the conditions to qualify for the PIC cash payout, the Inland Revenue Authority of Singapore (Iras) said.
Signs of potential fraud could include the following:
- Businesses that do not employ genuine employees.
These businesses attempted to make CPF contributions to three individuals just to meet the "three local employees" condition for securing PIC cash payouts.
To substantiate their claims, these businesses prepared employment contracts that were purportedly signed by the "employees".
Upon review, Iras found that many such "employees" merely "lent" their names to help someone they knew and did not carry out work for the businesses.
- Businesses that engage in high-value cash transactions
Businesses have claimed that all transactions, including revenue from sales and qualifying PIC expenditure, were conducted entirely in cash despite the transactions being valued in tens or hundreds of thousands dollars.
These businesses claimed that they were therefore unable to provide banking documentation to Iras to verify the existence of such transactions.
In many of such cases, the tax authority's audits revealed that the transactions were not genuine.
CHIA YAN MIN