A sole-proprietor of a consultancy firm who allegedly acted as the ‘promoter’ of the Productivity and Innovation Credit (PIC) Scheme, is charged in court today (27 Jan).
The sole-proprietor, S. Chandran (35), a well-known magician and owner of consultancy firm Paradize Consultancy, was out on $200,000 bail and will return to court on 3 Feb.
Inland Revenue Authority of Singapore (IRAS) informed that the alleged promoter will face 58 charges of assisting 49 claimants to fraudulently obtain PIC cash pay-outs and bonuses. The 58 charges involve PIC claims amounting to $1,097,694.
Over the past year, IRAS had conducted extensive investigations into a number of suspicious PIC claims. IRAS’ investigations revealed that many of the suspicious claims were linked to this PIC promoter. About 200 persons were called up to assist in IRAS’ investigations, it said.
IRAS will take enforcement actions against the claimants, where appropriate, once the investigations are completed, the release stated on Thursday (26 Jan).
The PIC scheme offers tax deductions or cash payouts to companies that invest in areas such as staff training, information technology or automation equipment to encourage productivity and innovation activities in Singapore.
It is meant for qualified businesses with real productivity-enhancing investments. However, many promoters seek out individuals not carrying out business to register companies and businesses purely to make false claims.
In a typical fraudulent PIC scam, the PIC promoter may assist claimants by providing false documentation to help support the expenditures declared in their PIC cash pay-out applications.
Such documentation may include false employment contracts, working time sheets, payment vouchers, product flyers or brochures, quotations and invoices.
In addition, where the claimants do not fulfill the PIC application condition of three local employees, the PIC promoter would provide the names and particulars of up to three unrelated persons just for the purpose of falsely representing to IRAS that the claimants have met the prerequisite of three local employees.
These false employees could include friends, relatives, retirees and unemployed persons. Some of these false employees might not have known that their names had been used for PIC claims.
In return for facilitating the false PIC claims, the PIC promoter will take a cut from the PIC cash pay-outs given to the claimants.
If convicted, Chandran faces penalties of up to four times the amount of PIC cash payout and bonus fraudulently obtained (or which would have been obtained if the offence had not been detected), and a fine of up to $50,000 or imprisonment of up to five years.