SINGAPORE: Ang Wilson (“Ang”), 34, a former managing director of Fabriglass Construction Pte Ltd (“Fabriglass”) which was in the business of supplying glass and aluminium to the construction industry, has been sentenced by the Court to 64 weeks of imprisonment and ordered to pay a total of $1,005,073 in fine and penalties after being found guilty of committing the following tax offences:
(a) 3 offences of GST evasion whereby Ang wilfully with intent to assist the company, Fabriglass, to omit output tax totalling $327,497 in the GST returns of Fabriglass for 3 quarters from April 2016 to December 2016; and
(b) 1 offence –for wrongful issuing of a tax invoice to its customer on 28 November 2015 and unlawfully charged and collected $7,027 as GST, during the time when Fabriglass was not a GST-registered business.
For the 3 proceeded charges under section 62(1) of the GST Act, the Court sentenced Ang to 64 weeks of imprisonment and ordered him to pay a penalty of $982,491, which is 3 times the amount of GST undercharged.
For the 1 proceeded charge under section 64(2)(a) read with section 74(1) of the GST Act, Ang was ordered to pay a penalty of $21,082, which is 3 times the amount of GST collected and a fine of $1,500.
IRAS’ audit programme uncovered the offence
IRAS conducts regular audits of GST-registered businesses, and such GST omissions can be detected through the use of data analysis and risk profiling. Using data analytics and advanced statistical tools, IRAS is able to cross-check data and detect anomalies. This case was uncovered through one such audit programme.
Severe Penalties for GST Evasion
It is a serious offence to wilfully evade tax or to wilfully assist another person to evade tax by submitting false GST returns such as by understating any output tax, overstating any input tax, excluding taxable supplies or including fictitious transactions. Upon conviction, offenders are liable to pay a penalty of three times the amount of tax undercharged and are liable to be punished with a fine not exceeding $10,000, and/or to imprisonment of up to seven years.
With the endorsement of the enhanced sentencing framework for GST evasion by the High Court on 17 January 2022 following the case of PP v. Pua Om Tee, offenders will face a stiffer imprisonment sentence which takes into account the harm caused by the offender and his or her culpability, such as the quantum of tax evaded, the degree of planning and premeditation and sustained period of offending. The imprisonment term imposed for GST evasion under Section 62 of the GST Act may span the full range of up to seven years.
It is a serious offence for businesses that are not GST-registered to issue tax invoices and collect GST from their customers. Offenders face a penalty of three times the amount of tax unlawfully collected and a fine of up to $10,000 for each offence.