An insurance agent, who did not declare commission income of nearly $2 million and did not account for goods and services tax (GST) of about $320,000, has been ordered to pay a total of $663,008 in fines and penalties for evading taxes.

Investigations by the Inland Revenue Authority of Singapore (Iras) found that Chew Wai Ling, 56, failed to declare commission income of $1.96 million that she had earned in 2009 and 2010. Also, she had provided goods or services exceeding $1 million in 2007, Iras said in a statement on Wednesday.

This annual turnover required her to notify the taxman and register for GST by January 2008. In failing to do so, she skipped paying $320,412 in GST.

For filing incorrect tax returns without a reasonable excuse, Chew was fined $6,000 and ordered to pay a penalty of $621,967, which is twice the amount of income tax that she was undercharged.

For failing to register for GST, she was fined $3,000 and ordered to pay a penalty of $32,041, which is 10 per cent of the GST she should have paid.

Iras has reiterated that all income earned in or derived from Singapore, including income earned from one's trade, profession or vocation, is taxable.

"Commission agents such as insurance or property agents receiving commission for their services must report their commission income as part of their total personal income in their returns," the taxman said.

The penalty for making incorrect returns, without a reasonable excuse or through negligence, is twice the amount of tax undercharged. Jail terms might be imposed in some cases.

As for GST registration, all businesses - including individuals deriving income from their trade, profession or vocation - should monitor their income and assess if they need to register for GST, said Iras.

"If their past 12-month taxable turnover has exceeded $1 million at the end of any calendar quarter, they are required to apply for GST registration within 30 days."

A business that fails to register for GST is still required to pay the tax on all its past transactions from the date it became liable for GST registration. GST is payable to Iras even when the business fails to collect the tax from its customers. If businesses fail to register for GST, they can be required to pay a penalty of 10 per cent of the GST due and be fined up to $10,000. In the last three years, the taxman has audited 400 businesses that had failed to register for GST and recovered $53 million in GST and penalties.