SINGAPORE — A former insurance agent was sentenced to four months’ jail for under-declaring close to $300,000 in trade income, the first such case to be convicted under a new and stiffer sentencing framework under the Income Tax Act.
Allan Lam, 30, was also ordered to pay a penalty of $151,044, three times the amount of taxes evaded, said the Inland Revenue Authority of Singapore (IRAS) in a press release on Friday (24 May).
The punishment for similar offences under the previous framework was one to two weeks’ jail term, according to IRAS’ senior tax prosector Norman Teo.
Under the revised framework, a person who is convicted of income tax evasion faces a penalty of triple the amount of tax evaded, and may also be fined up to $10,000 or jailed up to three years, or both.
Lam had declared his trade income for Years of Assessment (YAs) 2013 and 2014 to be $53,322 and $123,796, when they were $70,172 and $401,356, respectively.
The total of under-declared income amounted to $294,410, resulting in $51,173 of undercharged taxes, said the IRAS.
Lam was subsequently asked by the authority to substantiate his business expenses claims during an audit.
“Instead of coming clean about his fictitious business expenses, Lam went on to submit 36 forged payment vouchers,” said the IRAS.
The vouchers, amounting to $84,000, were for referral fees purportedly paid to three individuals who were his insurance clients. Other business expenses declared by Allan were also found to be false, said the IRAS.
Lam had made multiple false entries in his income tax return, the authority added.
Businesses or individuals are encouraged to immediately disclose any past tax mistakes, said IRAS.
Such disclosures will be treated as mitigating factors when considering action to be taken, it added. Those who wish to disclose past mistakes or report malpractices can write to the IRAS’ Investigation & Forensics Division.
A reward based on 15 per cent of the tax recovered, capped at $100,000, will also be given to informants if the information and/or documents provided lead to a recovery of tax that would have otherwise been lost, said IRAS.
All payments are at the discretion of the Comptroller and the identities of informants are kept strictly confidential, it added.
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