Owner of interior design company to spend 50 days in prison for illegally collecting GST

SINGAPORE - The owner of an interior design business who collected goods and services tax (GST) despite not being registered to do so will have to serve a 50-day jail term.

Mohaideen Osman, 39, pleaded guilty on Tuesday to eight charges of unlawful GST collection and was ordered to pay a penalty of $26,590 - three times the illegal GST he collected - as well as a fine of $12,000. As he cannot pay, he will be jailed for 50 days. He must also pay the Comptroller of GST the money he pocketed illegally.

Mohaideen became the sole proprietor of Formz Design International in April 2009 but did not register for GST, said the Inland Revenue Authority of Singapore (Iras) on Wednesday.

Investigations showed that Mohaideen issued eight sales invoices to the Agricultural Bank of China that year, which had engaged his company to provide interior design and renovation services. These invoices included 7 per cent GST, which came to $8,863 in total. Another 16 charges were considered during sentencing.

Under the GST Act, offenders who collect GST unlawfully face a penalty of three times the amount of the tax and a fine of up to $10,000 for each offence. Five people and businesses have been convicted previously, with their taxes and penalties coming to $810,000 in total, Iras said.

To check if a business is registered for GST, the public can use the business name or business registration number on the Iras website (www.iras.gov.sg).

The public can also write to Iras at ifd@iras.gov.sg to report GST malpractices. They may receive a reward of 15 per cent of the tax recovered, capped at $100,000, if they provide information and/or documents that lead to the recovery of tax that would otherwise have been lost.