Woman given four weeks' jail and ordered to pay penalty of over $170k for evading GST

SINGAPORE - A 48-year-old woman has become the first person to be convicted of wilfully evading the Goods and Services Tax (GST) by not reporting the amount collected from the sale of a non-residential property.

Kho Foong Kuin was sentenced to four weeks' jail and ordered to pay a penalty of over $173,000 - three times the amount of tax she evaded - on one count of evading GST.

The court heard that Kho and her husband are the two directors of Speed Safety International, a firm which sells security and fire-fighting equipment. Kho was in charge of accounting and other payment matters while her husband takes care of sales and operational matters.

In June 2012, Speed Safety purchased a property at No. 71 Tuas View Place but, in early 2014, a decision was made to sell the property to alleviate the company's financial difficulties. The company made arrangements to sell the property at an agreed price of $828,000, with the GST payable at $57,960. The sale was completed in June 2014 and a tax invoice prepared and endorsed by Kho clearly stated the sale price and GST of the property.

Despite knowing that she had to declare and pay the tax collected from the sale to the Inland Revenue Authority of Singapore (IRAS), Kho failed to do so intentionally, hoping to use all of the sale proceeds to alleviate the financial problems of her company.

It was revealed in court that Kho made full restitution to the IRAS, even before she was charged with the crime. But tax prosecutor Norman Teo said a jail term of four to six weeks' was justified because of the "high amount of GST evaded." He also said that such one-off high level infractions can be difficult to detect.

Those convicted of evading GST can be jailed for up to seven years, made to pay three times the amount of tax under charged and a fine not exceeding $10,000.

Between 2012 and 2017, IRAS found 144 businesses failed to account for GST collected on the sale of non-residential properties. The total amount of taxes and penalties recovered from these businesses was $11.9 million.

In a media release, IRAS said that such offences sometimes occur as businesses lack an adequate understanding of GST law, which stipulates that sale of non-residential properties owned by businesses are regarded as part of their business, even when it's a sole proprietorship or partnership.