Two brothers, who own a business in Ghim Moh popularly known as Ah Seng Durian, have been found guilty of not paying taxes, including not registering for goods and services tax (GST), when their company's revenue exceeded $1 million.
Shui Poh Sing, 60, and Shui Poh Chung, 57, had underdeclared their company's income by about $708,000 for six years.
As a result, they failed to pay an additional $161,604.62 in taxes.
Yesterday, the younger Shui was fined $10,000 and ordered to pay a penalty of $46,303.14 by District Judge Adam Nakhoda.
His older brother will be sentenced next Tuesday, with the prosecution asking for a jail term of four to eight weeks and a fine of between $5,000 and $7,000, along with the requisite penalties.
Although the siblings shared the business profits equally, the older brother is the managing partner, and in charge of the accounts and record keeping of the business.
They had inherited minimart Shanghai Moh Lee Seng from their father who died in 1999. On Feb 20, 2012, it ceased operating and they moved the business to Seng Chung Trading - also known as Ah Seng Durian - which they had set up.
Senior tax prosecutor Patrick Nai, from the Inland Revenue Authority of Singapore (Iras), told the court the undeclared income Seng Chung Trading earned from durian sales, was used to finance the mortgage payments of the brothers' respective properties in Malaysia.
Also, Shanghai Moh Lee Seng's turnover crossed the $1 million threshold for GST registration on Dec 31, 2006, Mr Nai said.
Under the GST Act, the older Shui was required to notify the Comptroller of GST and register the business for GST by Jan 31 the following year. He failed to do so.
In mitigation, their lawyer Vinit Chhabra said there was a mix-up which could be attributed to the brothers using a single bank account for both their private and business matters. Income went into the account and payments went out, without a fixed method of keeping track.
He said the older Shui handled the accounting work, despite having no training in accountancy, and this could have led to some lapses.
The older brother took up the task when their last accountant retired after their father's death, the lawyer told the court.
But after investigations into their tax offences started in 2014, the brothers hired a professional accountant the next year, Mr Vinit said.
Iras stressed, in a statement yesterday, "there will be severe penalties for those who wilfully evade tax".
The penalties can be up to four times the amount of tax evaded and jail terms may be imposed. It also said informants can get cash rewards, based on 15 per cent of the tax recovered, capped at $100,000.