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Sole-proprietor to pay penalty of $344,522 for omission of income

Tan Siew Hoon Pauline, 44, the sole-proprietor of Staffing Network which provides recruitment services, pleaded guilty on 30 July 2018 to five charges of understating her income without reasonable excuse for Years of Assessment (YAs) 2009 to 2013.

The court sentenced Tan on Monday (17 September) to pay a penalty of $344,522, which is two times the tax undercharged of $172,261, and a fine of $17,500. One other charge of failing to notify the Comptroller of Goods and Services Tax of her liability to be registered for GST was taken into consideration for sentencing.

Investigations revealed that Tan had only declared $444,633 in her income tax returns for YA 2009 to 2013 when the net income earned was $1,748,058. In addition, Tan did not notify the Comptroller of GST when the taxable turnover of Staffing Network had exceeded $1m in Year 2009.

Tan was the sole signatory of Staffing Network’s bank account and she personally managed and prepared the accounts of Staffing Network. She tracked the revenue payments from her customers, made payments for Staffing Network’s operating expenses and banked in customers’ cheques into Staffing Network’s bank account.

IRAS stressed that it takes a serious view of non-compliance and tax evasion.

"There will be severe penalties for those who either give incorrect returns or wilfully evade tax. Penalties for tax evasion can be up to four times the amount of tax evaded. Jail terms may also be imposed," it noted.

IRAS stated that businesses or individuals are encouraged to immediately disclose any past tax mistakes. IRAS will treat such disclosures as mitigating factors when considering action to be taken.

IRAS reminds the public that a reward based on 15 percent of the tax recovered, capped at $100,000, will be given to informants if the information and/or documents provided lead to a recovery of tax that would have otherwise been lost. All payments are at the discretion of the Comptroller, adding that it will ensure that the identities of informants are kept strictly confidential.