Accountant jailed six weeks and ordered to pay $105,501 penalty for dodging tax

SINGAPORE - An accountant was jailed for six weeks and ordered to pay a penalty of $105,401, or three times the amount of tax evaded.

Kung Seah Lim, 61, who faced five charges of tax evasion, admitted on Monday to two counts of omitting $87,839 from his income tax return for 2006 and $154,996 for the year of assessment 2010.

In all, he wilfully omitted trade income of $342,836 in his income tax returns for the years of assessment 2006, 2007, 2009, 2010 and 2011.

He evaded $45,568 in income tax in total.

Investigation showed that Kung had not declared the trade income from his sole proprietorship, Kung Seah Lim & Co, which provided audit, liquidation and tax services, for five years of assessment.

He had deliberately declared "no trade income'' when filing his income tax returns for those five years.

This was even though he was solely responsible for signing the tax invoices issued to customers, and was well aware of the revenue earned from his business. He also had the invoice and expense records as well as staff to prepare the profit and loss statements.

The Inland Revenue Authority of Singapore (Iras) said in a statement that it takes a serious view of such offences by errant tax agents.

Tax agents, especially accountants, have extensive knowledge and understanding of Singapore's tax system and are expected to be compliant with their own tax reporting obligations.

Iras will take deterrent actions against tax agents who deliberately under-declare their taxes or facilitate their clients' under-declaration of taxes.

Businesses and individuals are encouraged to immediately disclose any past mistakes. Iras will treat such disclosures as mitigating factors when considering the actions to be taken.

A reward based on 15 per cent of the tax recovered, capped at $100,000, will be given to informants if the information and/or documents provided lead to the recovery of tax otherwise lost. The identities of informants are kept strictly secret and confidential.

Kung could have been fined up to $10,000 and/or jailed for three years on each charge.