3 company directors get jail, handed $310,000 in penalties for evading income taxes, GST

The Inland Revenue Authority of Singapore building. A director of an information technology firm pleaded guilty in court to two charges of goods and services tax evasion, which amounted to $77,230 in fraudulent refunds.
The Inland Revenue Authority of Singapore building. A director of an information technology firm pleaded guilty in court to two charges of goods and services tax evasion, which amounted to $77,230 in fraudulent refunds.ST PHOTO: KUA CHEE SIONG

SINGAPORE - Three company directors have been sentenced to jail and given monetary penalties totalling about $310,000 for evading taxes in two cases.

In the first case, Koh Kok Huat and Adrian Yeo, directors of both Foster Asia Pacific and Ematco Industrial, have been sentenced to three weeks' jail each for evading income taxes by not declaring company bonuses they received.

Koh and Yeo have also been ordered to pay $93,086 and $68,797 in penalties respectively for their tax offences, said the Inland Revenue Authority of Singapore (Iras) in a statement on Friday (Oct 11).

They faced three charges in court on Friday for making false entries in their income tax returns with the wilful intent to evade tax.

They pleaded guilty to one charge, with two other charges taken into consideration during sentencing.

Foster Asia Pacific and Ematco Industrial both sell industrial materials in the marine industry.

Iras said that for the years of assessment between 2011 and 2013, Koh and Yeo did not declare bonuses totalling $337,000 and $280,360, which resulted in $64,805 and $49,680 in taxes undercharged respectively.

Investigations revealed that the pair would decide how much bonus was to be paid to themselves.

 
 

The payment vouchers from these bonus were called "subcontractor fees" and placed under the "subcontractor fees" account in the businesses’ financial records.

Iras warned that there will be severe penalties for those who wilfully evade tax and it will not hesitate to bring offenders to court.

Offenders may face a penalty of up to four times the amount of tax evaded and jail terms may be imposed.

In another tax evasion case on Friday, a director of an information technology firm was sentenced to four weeks' jail and ordered to pay a $147,795 penalty for evading the goods and services tax (GST).

Arthur Yeo Yao Zhi, director of Orynix, pleaded guilty in court on Friday to two charges of GST evasion which amounted to $77,230 in fraudulent refunds between March and September 2012, said Iras in another statement.

Two other charges of tax fraud were taken into consideration for sentencing.

Orynix was an IT consultancy company which provided system maintenance, IT solutions and IT infrastructure management services to clients.

Arthur Yeo is the sole director and shareholder of the company.

Investigations revealed that he was solely responsible for the company's business operations, which include sourcing for sales, issuing tax invoices, collecting payments from customers, making orders and payments to suppliers.

Iras warned that any person found guilty of wilfully submitting false GST returns by overstating any input tax, understating any output tax or including fictitious transactions can face a penalty of three times the amount of tax undercharged. They can also receive a fine not exceeding $10,000, imprisonment of up to seven years, or both.

Informants of these offences can receive a reward based on 15 per cent of the tax recovered, capped at $100,000, if the information leads to a recovery of tax that would have otherwise been lost. All payments are at the discretion of the Comptroller. Iras will ensure that the identities of informants are kept confidential.

Iras also encouraged businesses or individuals to own up to past tax mistakes. Such disclosures will be treated as mitigating factors. Those who wish to disclose past mistakes or report malpractices can write to Iras or e-mail ifd@iras.gov.sg