Fraudulent GST claims land manager in jail for 18 weeks

[Untouchables]

Updated: 07/21/2014 12:21 | By Channel NewsAsia

Fraudulent GST claims land manager in jail for 18 weeks

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SINGAPORE: A manager at an IT firm was sentenced to 18 weeks' jail and a fine of S$183,925.62 on Monday (July 21) for making fraudulent Goods and Services Tax (GST) returns.

Samuel Sim Choon Hock pleaded guilty to eight charges of making fraudulent GST claims, and the fine meted out was three times the fictitious claims for GST refunds - totalling S$61,308.54 - that he had made in the IT company's name, the Inland Revenue Authority of Singapore (IRAS) said on Monday.

GST-registered businesses offset the GST they pay for their purchases against the GST they collect from sales, and pay the net difference to IRAS. If the business incurs more GST on purchases than it collects from sales, the company can claim the difference from IRAS in the form of GST refunds, IRAS said.

Sim's transgression was detected by IRAS' audits on businesses, which uses data analytics tools to spot anomalies in the tax claims of GST-registered businesses. He faced 24 charges of making fraudulent GST claims amounting to a total of S$116,558.04. He had used the money to pay for his personal and family expenses, according to IRAS.

The remaining 16 charges were taken into consideration in the sentencing as Sim was cooperative during the investigation process, the agency added.

FRAUDULENT GST CLAIMS A "SERIOUS OFFENCE"

IRAS reiterated that it is a serious offence to claim input tax on fictitious purchases or understate output tax on sales. Offenders face a penalty of up to three times the amount of tax undercharged, a fine not exceeding S$10,000, and/or imprisonment of up to seven years.

The authority also said businesses or individuals are encouraged to immediately disclose any past tax mistakes, and such disclosures will be treated as mitigating factors when deciding on the action to be taken.

IRAS also said informants would receive a reward based on 15 per cent of the tax recovered, capped at S$100,000, if the information and/or documents provided lead to a recovery of tax that would otherwise be lost. All payments are at the discretion of the Comptroller, and informants' identities are kept strictly secret and confidential, it added. - CNA/kk