The Inland Revenue Authority of Singapore (IRAS) released an official statement on 29 August that Ha Wai Kay (64) the sole-proprietor of Kay Lee Roast Meat Joint has been convicted of evading income taxes amounting to $54,917.15 for Years of Assessment (“YA”) 2010 and 2011. Her wife, Kong Kuee Chin (69) the sole-proprietor of Wan Tat Eating House (“Wan Tat”), was also convicted of assisting Ha to evade taxes.
Kong, was in charge of recording the sales amounts. She would manually record the daily cash collections and expenditures for both Kay Lee and Wan Tat into her diary, and provide a total monthly sales income for both businesses in one lump sum, on slips of paper, to their accountant who assisted in the preparation of their statement of accounts and their income tax returns.
Kong provided their accountant with Wan Tat’s estimated monthly sales of the year of 2009 and 2010 (YA2010 and YA2011), from which their accountant would deduct from the lump sum figure to derive Kay Lee’s annual sales income figure for the relevant YA. Their accountant would explain the figures to be submitted to Ha and Kong, and upon Ha’s agreement, submit the income tax returns to IRAS.
IRAS held investigations which revealed that for YA2010, Kong had knowingly provided Kay Lee’s total sales income as $531,924 to their accountant, when the actual sales income was $693,839.
Similarly, for YA2011, Kong had knowingly provided Kay Lee’s total sales income as $665,413 when the actual sales income was $829,335. Ha had under-declared his income by $161,915 in YA2010 and $163,922 in YA2011.
The couple were undercharged for income tax by a total of $54,917.15 for the 2 years of assessment ($26,017.78 for YA2010 and $28,899.37 for YA2011).
The Court sentenced Ha to 4 weeks’ jail and ordered him to pay a penalty of $164,751.45, three times the amount of tax evaded. Kong was also found guilty and convicted of assisting Ha to evade taxes. The Court also sentenced Kong to 4 weeks’ jail and ordered her to pay a penalty of $164,751.45, three times the amount of tax evaded, for assisting in tax evasion. The total amount of penalty ordered for both Ha and Kong is $329,502.90.
The couple had pleaded guilty and made full payment of the income tax evaded.
IRAS declared that serious action would be taken against non-compliance and tax evasion. Penalties for tax evasion can be up to four times the amount of tax evaded. In certain situations, jail terms may also be imposed.
A reward based on 15% of the tax recovered, capped at $100,000, would be given to informants if the information and/or documents provided lead to a recovery of tax that would have otherwise been lost.
Those who wish to disclose past mistakes, reveal evaded taxes, or report malpractices that might indicate tax evasion, can write to:
Inland Revenue Authority of Singapore
Investigation & Forensics Division
55 Newton Road, Revenue House
Singapore 307987
Email: [email protected]