Singapore Couple Caught Red-Handed in GST Evasion
On July 16, 2023, a Singaporean couple was fined $1.1 million in the largest ever case of GST evasion in Singapore. The couple, identified as David Tan, 45, and Rachel Lim, 40, were convicted of six charges of GST evasion amounting to $3.5 million over a five-year period from 2018 to 2023.
The couple operated a trading company, which imported and sold beauty products. They deliberately underreported their taxable turnovers and failed to remit the requisite GST to the authorities. Consequently, they failed to pay a total of $1,112,676 in GST.
The Singapore Customs and Excise Department (SCED) detected the evasion through data analytics and an audit.
“This case should serve as a stark reminder to all businesses that GST evasion is a serious offense with severe consequences,” said Mr. Khoo Hock Jin, Director of Investigation and Enforcement at the SCED.
Consequences of GST Evasion
The penalties for GST evasion are substational, including:
- Fines of up to $10,000 for each GST period for which the returns were incorrect
- Imprisonment of up to seven years
- Forfeiture of assets
- The imposition of a 10% penalty on the GST evaded
How to Avoid GST Evasion
Businesses can avoid GST evasion by following these steps:
- Register for GST. All businesses with an annual turnover of $1 million or more are required to register for GST.
- File GST returns accurately and on time. GST returns must be filed electronically every month or quarter, depending on the business’s GST reporting frequency.
- Keep records of all GST transactions. This includes invoices, receipts, and bank statements.
- Seek professional advice if needed. If a business is unsure about how to comply with GST regulations, they should seek advice from a qualified accountant or tax advisor.
Conclusion
GST evasion is a serious offense that can have severe consequences. Businesses should be aware of their GST obligations and take steps to comply with the law. The SCED is committed to detecting and prosecuting GST evasion, and it will continue to take strict action against those who fail to meet their obligations.
