14 charged over false PIC claims

Claims amounting to $334,464 said to be linked to magician charged last month

A lawyer was among 14 individuals charged yesterday with making false Productivity and Innovation Credit (PIC) claims.

The PIC scheme grants businesses significant tax deductions or payouts for investments in innovation, automation, training, and research and development.

The claims made by 10 men and four women are said to be linked to magician S. Chandran, 35, who was charged last month with 58 counts of helping 49 claimants to fraudulently obtain PIC cash payouts and bonuses totalling $1.1 million.

The 14 had registered sole proprietorships, partnerships or companies and used them to allegedly make false claims. Their claims, amounting to $334,464, were made between 2013 and 2014.

Kangatharan Ramoo Kandavellu, 55, owner of law firm Kanga & Co, is accused of making a false claim of $24,606 on July 1, 2014 in respect of three employees which he knew to be false. The amount was not disbursed in his case.

All 14 cases have been adjourned for further mention next month.

There have been instances where claimants - who have neither incurred qualifying expenditure nor made actual investment to enhance productivity and innovation - abuse the scheme. They do so by entering into artificial arrangements with third parties, such as vendors, to make false PIC claims.

In such scenarios, claimants will typically enter into artificial arrangements with vendors to give the impression that they had incurred the expenditures for which their PIC claims are based on.

They may also submit the names and particulars of people who are not their employees to the Inland Revenue Authority of Singapore (Iras) to show that they have met the PIC scheme's condition of employing three local employees.

Iras said in a statement yesterday that it takes a serious view of any attempt by claimants, vendors or promoters to abuse the PIC scheme and defraud the Government.

Anyone who commits PIC offences might be subject to penalties of up to four times the amount of PIC cash payout and PIC bonus fraudulently obtained, or which would have been obtained if the offence had not been detected, and fined up to $50,000 or jailed for up to five years.

A version of this article appeared in the print edition of The Straits Times on February 18, 2017, with the headline '14 charged over false PIC claims'. Print Edition | Subscribe