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Boss of Social Escort Agency Jailed for Tax Evasion and PIC Fraud

On the 11 Feb 2016, we were informed that a Mr. Chew Tiong Wei, 38, being a sole-proprietor of a social escort business, has been convicted of tax evasion and PIC fraud.

Investigations by the Inland Revenue Authority of Singapore (IRAS) and the Singapore Police Force (SPF) have led to the prosecution of Chew Tiong Wei for both vice-related and tax-related offences.

He pleaded guilty on 7 Dec 2015 to two charges of wilfully omitting income of $275,685 in his Income Tax Returns for Years of Assessment (“YAs”) 2012 and 2013, thereby evading $26,964.65 in income tax. I guess under- and non-declaration of income are common temptations enough for someone already in such a trade.

Consequently Chew was sentenced to 6 months’ jail for each charge of tax evasion, AND (it is not a “or”) was ordered to pay a total penalty of $80,893.95, being three times the amount of tax evaded.

 

What is more INTERESTING to me is that he also pleaded guilty to one charge of submitting false information in order to obtain a Productivity and Innovation Credit (PIC) cash payout and PIC bonus of $24,000. How did IRAS investigate the case?

Chew had also submitted a PIC cash payout application for the purchase of a Customers Relationship Management System by giving FALSE information to meet the qualifying conditions for the cash payout.

IRAS’ investigations revealed that the business did not fulfil the condition of employing three local employees – the three persons named as his employees were in fact his father, mother, and wife who had NEVER worked for his business. To make his claim appear legitimate, he made CPF contributions to their CPF accounts.

Consequently, he was also ordered by the Court to pay a penalty of $72,000, three times the PIC cash payout of $24,000 that he had wrongfully obtained, AND sentenced to 6 months’ jail.

While there is nothing wrong for family members to be working in your business, it would be wrong if the headcount were created to meet the conditions of PIC CASH PAYOUT.

Source – IRAS.gov.sg

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