SINGAPORE: The owner of a recruitment firm was fined S$17,500 on Monday (Sep 17) and made to pay a penalty of S$344,522, twice the amount of tax she evaded over five years.
Pauline Tan Siew Hoon, 44, was the sole proprietor of Staffing Network, a human resource company that recruits both temporary and permanent staff.
Between 2009 and 2013, she declared only S$444,633 in her income tax returns, when the net income earned was S$1,748,058.
Tan also did not notify the Comptroller of Goods and Services Tax (GST) when her company's taxable turnover exceeded a million dollars in 2009.
Tan did all the accounting work for Staffing Network herself and did not hire an accountant, said Mr Charles Li, senior tax prosecutor with the Inland Revenue Authority of Singapore (IRAS).
She was the sole signatory of Staffing Network's bank account and managed the company's accounts, tracking revenue payments from customers, making payments for operating expenses and banking in customers' cheques.
Initially, IRAS allowed Tan to pay the undercharged taxes in instalments. However, Tan defaulted on these plans, claiming that she had cash flow constraints.
IRAS investigations later found that Tan was able to pay the outstanding amount as she had assets consisting of unit trusts with a value of nearly S$1 million under an investment account with iFast Financial, Mr Li said.
However, Tan's defence lawyer Gurbachan Singh said the iFast account belonged to Tan's aunt. In response, Mr Li said the account was under Tan's name, and the beneficiary was her son.
The prosecution asked for a fine of S$4,000 for each of the five charges Tan faced, saying that there was "overwhelming evidence" in bank statements, invoices and credit card statements.
The defence asked for three years for Tan to pay the penalty, but District Judge Jasvender Kaur said this was "excessive".
She gave her until June 2020 to finish paying the penalty in instalments, on top of her S$17,500 fine.
Tan now runs a baking business selling cookies in Takashimaya, which she said generates about S$5,000 a month.
Penalties for tax evasion can be up to four times the amount of tax evaded, and offenders can be jailed.