Business owner first to be prosecuted under Iras scheme that monitors potential tax dodgers

SINGAPORE - The operator of two optometry businesses has become the first person to be prosecuted in Singapore under a programme that monitors recalcitrant taxpayers.

Ang Leong Siong, the sole proprietor of Nice Vision Optical and a partner of Eyes to Eyes, was sentenced to six months and three weeks' jail in court on Friday (May 20).

The 44-year-old was also ordered to pay $561,800 in fines and penalties.

Under the Post Compliance Surveillance Programme, the Inland Revenue Authority of Singapore (Iras) monitors and reviews taxpayers who pose a higher risk of non-compliance.

This is done to ascertain if they have made improvements in their tax reporting, the authority said on Friday.

Ang had pleaded guilty to two counts of income tax evasion involving $151,725, and one count of failing to notify Iras of his liability to be registered for goods and services tax (GST).

He also pleaded guilty to three counts of GST evasion involving $24,299 and one count of falsely making claims under the Productivity and Innovation Credit Scheme.

The government scheme was introduced to motivate businesses to upgrade their capabilities through innovation.

Ang had received $6,000 via the scheme after providing fictitious details and claiming that he was providing training for staff of Nice Vision Optical.

Iras' tax prosecutor Lim Pei Ying said in court documents that Ang had omitted certain trade income for his two companies while filing his personal income tax returns in 2013 and 2014.

He also entered fictitious sales figures for Nice Vision Optical, left out the combined sales of its two branches and indicated its gross profit by estimating the cost of sales instead of tabulating the gross profit based on actual amounts shown in suppliers' invoices.

Ang also falsely declared a lower amount of partnership profit from Eyes to Eyes in his income tax returns.

He added his wife at the time as a partner of the company and declared his partnership profit at 50 per cent share of the total partnership profits, when in fact all of the profits were derived by him.

Ang was the only one operating the two businesses that sold spectacles and other optical goods such as contact lenses and lens solutions, said Ms Lim.

The Iras prosecutor said the business owner knew that the entries he made in the income tax returns for years of assessment 2013 and 2014 were incorrect.

"He had deliberately made the false entries as he knew he would be paying a lower amount of income tax and avoiding GST registration," added Ms Lim.

In a statement on Friday, Iras said that between 2017 and 2020, it reviewed the tax affairs of 402 self-employed taxpayers under the Post Compliance Surveillance Programme.

It noted that most taxpayers have taken corrective actions to ensure the accuracy of their tax reporting.

"Taxpayers who continue to report their taxes incorrectly may face a heavier penalty of up to two times the amount of tax undercharged. Penalties will be higher if tax evasion is involved," the statutory board added.

Iras also reminded those who are self-employed to keep proper records of their business income and expenses, encouraging them to digitise their record keeping so that the income earned and the expenses claimed can be more readily tracked.

Join ST's WhatsApp Channel and get the latest news and must-reads.