Ah Seng Durian's owners under-declared income by S$708,000; one faces jail
Durian sellers Shui Poh Chung and Shui Poh Sing, who owned two businesses, were charged in court on May 3, 2019.
SINGAPORE — Two brothers selling durians in the Ghim Moh area were hauled to court on Friday (May 3) for under-declaring their trading income by about S$708,000 over a six-year period.
They had also failed to register for Goods and Services Tax (GST) when one of their companies’ revenue crossed S$1 million in 2006.
Shui Poh Chung, 57, who is the younger of the duo, was fined S$10,000 on top of a penalty of S$46,303.14. The penalty was double the amount of taxes undercharged for the two tax evasion charges he pleaded guilty to.
Shui Poh Sing, 60, could be jailed after pleading guilty to three charges — two under the Income Tax Act and one under the GST Act.
District Judge Adam Nakhoda said that a custodial sentence appeared warranted as the older brother was more culpable for the offences as he is the managing partner of the brothers’ two minimarts, Shanghai Moh Lee Seng and Seng Chung Trading. A sentence of deterrence has to be meted out as it is “hard to detect (tax evasion) unless taxpayers come clean”, the judge said before adjourning the sentencing to May 7.
Seng Chung Trading runs the popular Ah Seng Durian stall at Ghim Moh.
The prosecution is seeking a jail term of four to eight weeks, a penalty three times the amount of taxes undercharged and 10 per cent more than the GST undercharged totalling S$77,077.91, as well as a fine. In addition, he would be required to pay S$87,314 in backdated GST taxes.
Pointing out that there was a “public element” in this case as tax evasion was “very prevalent”, Senior Tax Prosecutor Patrick Nai called for a “reasonably harsh” sentence to be given.
The court heard that the brothers, who are Singaporeans, were equal partners in sharing their businesses’ profits. One of their two firms was inherited from their father, who died in 1999.
Shui Poh Sing’s lawyer, Mr Vinit Chhabra, said that the older brother took charge of the accounts and record keeping of the companies when their father’s accountant retired. He had no formal training in accountancy so the accounts were done in an “informal and unsophisticated way”, the lawyer pointed out.
Mr Nai told the court this was why investigations into their tax evasion dragged on for four and a half years. The accounts were “not properly kept at all” as he noted that many documents were discarded after Shanghai Moh Lee Seng closed in 2012 following an en bloc sale. Seng Chung Trading, which sells seasonal fruits such as durians, was registered to take over that business.
However, Mr Nai stressed that Shui Poh Sing knew the amount of income declared between 2008 and 2014 was “way below” what they were earning.
For instance, he omitted more than S$93,000 in earnings in 2008 and this grew to S$103,592.11 in 2014. For these two years, he underpaid close to S$9,000 and S$13,900 in taxes respectively.
The undeclared income earned from the sale of durians by Seng Chung Trading was used to finance mortgage payments for the brothers’ properties in Malaysia, added the prosecutor.
Mr Nai also noted that Shui Poh Sing was required under the GST Act to notify the Comptroller of GST of Shanghai Moh Lee Seng’s liability to register for GST by Jan 31, 2007, but he failed to do so until investigations began.
The Inland Revenue Authority of Singapore said in a media statement on Friday that it takes a serious view of non-compliance, adding that those who wilfully evade tax face “severe penalties” of up to four times the amount of tax evaded. It also reminded taxpayers that they are “ultimately responsible” for the information declared in their income tax returns.
