SINGAPORE – An insurance agent, who did not declare commission income of nearly $2 million and did not account for goods and services tax (GST) of about $320,000, has been fined more than $660,000.
Chew Wai Ling, 56, was ordered to pay a total of $663,008 in fines and penalties after she was found guilty of her offences.
Investigations by the taxman showed that Chew did not declare commission income of $1.96 million that she earned in 2009 and 2010.
The investigations also found that she had provided goods or services subject to tax amounting to more than $1 million in 2007, the Inland Revenue Authority of Singapore (Iras) said in a statement on Wednesday (Nov 27).
She was required to notify the Comptroller of GST and register for GST by January 2008. She failed to do so.
As a result, she did not account for $320,412 in taxes.
For filing incorrect returns without a reasonable excuse, Chew was fined $6,000 and ordered to pay a penalty of $621,967, which is twice the amount of income tax undercharged due to the commission income she did not declare.
For failing to register for GST, she was fined $3,000 and ordered to pay a penalty of $32,041, which is 10 per cent of the GST due.
Iras said that all income earned in or derived from Singapore, including income earned from one’s trade, profession or vocation, is chargeable to income tax.
“Commission agents such as insurance or property agents receiving commission for their services must report their commission income as part of their total personal income in their returns,” said the taxman.
The penalty for making incorrect returns, without a reasonable excuse or through negligence, is twice the amount of tax undercharged and jail terms might be imposed in some cases.
As for GST registration, all businesses – including individuals deriving income from their trade, profession or vocation – should closely monitor their income and regularly assess if they need to register for GST, Iras said.
“If their past 12-month taxable turnover has exceeded $1 million at the end of any calendar quarter, they are required to apply for GST registration within 30 days.”
Any business that fails to register for GST is still required to pay the tax on all their past transactions from the date on which it became liable for GST registration.
GST is payable even if the amount was not collected from customers.
If businesses fail to register for GST, they can be required to pay a penalty of 10 per cent of the GST due and be fined up to $10,000.
In the last three years, the taxman has audited 400 businesses that have failed to register for GST and recovered $53 million in GST and penalties.
“Businesses or individuals are encouraged to immediately disclose any past tax mistakes. Iras will treat such disclosures as mitigating factors when considering the action to be taken,” it said.
Those who wish to disclose past mistakes, reveal evaded taxes, or report malpractices related to tax evasion can send an e-mail to firstname.lastname@example.org or write to Iras.
For informants, a reward of 15 per cent of the tax recovered, capped at $100,000, will be given if the information and documents lead to a recovery of tax that would otherwise have been lost.
All payments are at the discretion of the Comptroller, and Iras will ensure that the identities of informants are kept confidential.