8 weeks in jail, fine for parallel car importer who evaded taxes

Tang Luan Yew, who has to pay $3.7 million in fines and shortfall in tax, under-declared the value of imported cars.
Tang Luan Yew, who has to pay $3.7 million in fines and shortfall in tax, under-declared the value of imported cars.

A parallel car importer, who under-declared the open market value of imported cars and fraudulently evaded excise duty and the goods and services tax (GST), was jailed for eight weeks.

Malaysian Tang Luan Yew, 42, was also ordered to pay $3.7 million in fines and shortfall in tax yesterday.

The Singapore permanent resident had pleaded guilty to 185 of 660 charges under the Customs Act and Road Traffic Act.

Tang, who owns Teng Autosports Trading, had admitted to 104 Customs Act charges - 52 counts each of fraudulent evasion of excise duty and of GST - and 81 charges of giving incorrect information relating to the value of vehicles, causing a shortfall in the additional registration fee chargeable.

The court heard that in July 2015, Teng Autosports was investigated for fraudulent evasion of excise duty and GST on cars imported into Singapore from Japan, Britain and Hong Kong.

Excise duty is payable at the rate of 20 per cent on the transaction value of the imported motor cars. GST at the rate of 7 per cent and all other taxes, duties and charges levied have to be paid as well.

Tang stated values that were significantly lower than the actual transaction values of the cars in the Declaration of Facts for Assessment of Motor Vehicles. To support these lower values, he submitted invoices bearing similar values for the vehicles.

He did this by instructing his suppliers to create invoices with the suppressed values. He then masked the transaction values of the cars by making split and/or excess payments to the Japanese suppliers.

The "excess" payments would be used to partially pay for subsequent orders of cars from the Japanese suppliers.

For cars imported from Britain and Hong Kong, he would use a remittance service and make split payments based on the fake values.

To make up for the shortfall in the real value, he would pay the overseas suppliers in a separate transaction. He employed different payment methods to make it hard for the authorities to trace the actual transaction values and payments made for the cars.

He also did not keep a proper accounting record of the actual prices he paid for 113 cars to his suppliers in a bid to avoid detection.

But files retrieved from his laptops showed that the values of the imported cars were higher than the values declared.

Tang had obtained 52 approved permits for the import of 113 cars from Japan, Britain and Hong Kong in this manner between January and May 2015.

He knew the cars' actual values were much higher, and intentionally under-declared the values to pay less import excise duty and GST.

For the 104 charges proceeded, he paid an excise duty of $642,062 and GST of $269,666, when the actual amount payable was $777,463 and $326,534, respectively.

As a result of the under-declaration, he fraudulently evaded duty and GST totalling about $192,270.

The investigation showed that Tang had under-declared the open market value of 244 vehicles imported by his company, resulting in a shortfall of $1.71 million in the additional registration fee paid to the Land Transport Authority.

Tang, represented by Mr Choo Si Sen, paid $300,000 yesterday, and will pay the balance by monthly instalments over four years.

A version of this article appeared in the print edition of The Straits Times on September 22, 2017, with the headline '8 weeks in jail, fine for parallel car importer who evaded taxes'. Print Edition | Subscribe