SINGAPORE - Forty-three people are being investigated for being part of a suspected Goods and Services Tax (GST) fraud after the Inland Revenue Authority of Singapore (Iras) conducted a two-day operation.
The raids took place on Monday (Aug 15) and Tuesday (Aug 16) at several locations including Tannery Lane, High Street and Kallang Pudding Road.
Laptops, smartphones, SIM cards and business records were seized during the operation, said Iras in a statement on Thursday (Aug 18).
The alleged conspiracy involved making fraudulent claims for reimbursement of tax paid on exported goods.
In a carousel or merry-go-round fraud, the same goods are traded around a fake supply chain within and in some instances outside Singapore. These supply chains are usually controlled by one mastermind, often the first link in the chain.
For example, Company A would import goods and sell them to Company B, charging it GST. The director of Company A would then disappear before paying the GST he should have transferred to Iras.
The goods are then sold to bogus businesses which act as "buffer" companies in the supply chain which claim input tax paid on the goods - effectively seeking a refund of the GST amount Iras never received.
In some cases, no goods were actually exported and the business transactions were merely a paper exercise, with the sole aim of claiming fraudulent GST refunds, said Iras.
It added that stern enforcement actions will be taken against such traders and any intermediaries helping them. Anyone who commits the offence of wilful intent to evade or assist any other person to evade GST faces a penalty of up to three times the amount of tax undercharged and a fine not exceeding $10,000, and/or jail of up to seven years.
Iras encouraged businesses or individuals to "immediately disclose any past mistakes", saying that it "will treat such disclosures as mitigating factors when considering action to be taken".
A cash reward based on 15 per cent of the tax recovered, capped at $100,000, would be given to informants if the information or documents provided lead to a recovery of tax that would have been lost, it added.