Sole proprietor gets 54 weeks' jail, must pay $1.7m for evading taxes, failing to keep proper records

SINGAPORE - A sole proprietor who was convicted of evading goods and services (GST) tax, income tax and failing to keep proper business records has been jailed for 54 weeks and ordered to pay fines and penalties totalling $1,784,451.

Investigations showed that Khoo Chin Huat, 66, had poor record-keeping habits and intentionally misreported the GST returns of his company, Sin Metal Industries, from 2012 to 2016. The company deals mainly in the trading of cable drums.

These details were revealed in a media release issued by the Inland Revenue Authority of Singapore (Iras) on Friday.

Between Dec 31, 2012, and March 31, 2016, Khoo was found to have made false entries for GST returns and was subsequently undercharged $176,106.

He also made false entries in his income tax returns for the years of assessment 2013 and 2014, and evaded paying $417,044.

Khoo did not keep tax invoices from his company's suppliers and vendors, as required under the GST Act, for the 20 quarterly GST returns between March 31, 2012, and Dec 31, 2016.

He also failed to keep invoices from suppliers and vendors, as required under the Income Tax Act, for the years of assessment from 2013 to 2017.

Khoo's crimes were uncovered during Iras' regular audit programme, when it detected anomalies during its data checks to ensure tax compliance by individuals, businesses and the self-employed.

Iras said it takes a serious view of non-compliance and tax evasion. Offenders may face a penalty of up to four times the amount of income tax evaded, and may be jailed.

Offenders who wilfully evade tax by submitting false GST returns are liable to pay a penalty of three times the amount of tax undercharged and can be fined up to $10,000, or jailed up to seven years, or both.

Iras also reminded all taxable persons to keep proper records and accounts of all their taxable transactions.

Records pertaining to income tax must be retained for five years from the relevant year of assessment, while records pertaining to GST must be retained for at least five years from the prescribed accounting period. Those who fail to do so may be liable on conviction to a fine and/or a jail term.

Businesses or individuals are also encouraged to immediately disclose any past tax mistakes. Iras will treat such disclosures as mitigating factors when considering actions to be taken.

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