- POSTED: 29 Aug 2014 15:30
- UPDATED: 29 Aug 2014 16:00
Chua Guat, the former managing partner of Chuan Kok Trading, pleaded guilty to two charges of making false entries in her individual income tax returns for Years of Assessment 2005 and 2006.
SINGAPORE: The managing partner of a trading firm was sentenced to jail on Friday (Aug 29) for tax evasion, and ordered to pay back taxes and penalties of S$236,420.12.
Chua Guat, the former principal partner of Chuan Kok Trading, pleaded guilty to two charges of making false entries in her individual income tax returns for the Years of Assessment (YA) 2005 and 2006, the Inland Revenue Authority of Singapore (IRAS) said in a media release. She was sentenced to 10 days' imprisonment per charge, with the jail terms to be served concurrently. If she defaults on paying the penalty of S$177,315.09 - which is three times the amount of income tax evaded - she would have to serve an additional six months in jail.
Chua also committed other income tax and GST offences which were compounded by IRAS. As a result, she had to pay S$110,745.17 in back taxes and S$437,098.89 in penalties for these offences, the agency said.
IRAS said information provided by an anonymous informant helped it to uncover the case. Investigations revealed that Chua under-reported her income in YA 2005 and 2006.
At the time, she was principal partner of Chuan Kok Trading and responsible for the financial matters of the business including the maintenance of accounts and submission of the partnership's income tax returns. For both YAs, she engaged an accounting firm to prepare the company's statement of accounts and income tax returns.
However, she deliberately omitted some of the sales when passing the company's accounts to the accounting firm for their preparation of the financial documents. The under-stated company income resulted in the reduction of Chua's share of divisible profit from the partnership, and she "wilfully" declared the lower amounts of income in her tax returns, IRAS stated.
In addition, she inflated business expenses in the company's accounts to claim more tax deductions than it was entitled. This resulted in her under-reporting her share of partnership income by another S$278,087 - and Chua had to pay S$220,776.90 in additional taxes and penalties.
She also failed to report the GST output tax for the omitted sales and, for this, she had to pay S$327,067.16 in penal tax and the GST that was not accounted for.
In total, Chua had to pay a total of S$784,264.18 in taxes and penalties for all the tax offences committed, IRAS said.
OTHER PARTNERS FINED
Chua's two other partners, while not involved in the operations and preparations of company accounts, also under-reported their share of partnership income in their individual income tax returns.
For that, their offences were compounded and they had to pay a total of S$253,298.97 in back taxes, and S$257,160.61 in penalties, IRAS said.
"IRAS takes a serious view of taxpayers who do not comply with the need to submit proper income tax returns or have a wilful intent to evade tax. Taxpayers are also ultimately responsible for the information declared in their income tax returns," it added.