Singapore Lawyer Convicted and Jailed for Tax Evasion
9 Dec 2015
Ong Cheong Wei, 51, a practising lawyer and former sole-proprietor of law firm Ong Cheong Wei & Co ("OCWC"), was sentenced to 4 weeks in jail for wilfully omitting $306,305.00 in his Income Tax Returns for Years of Assessment ("YAs") 2007 and 2008, thereby evading income tax amounting to $39,447.26. He was also ordered to pay a penalty of $118,341.78, three times the amount of tax evaded.
Failure to keep proper records and declare income based on actual earnings
Ong Cheong Wei was the sole-proprietor of OCWC from November 2000 to March 2014. He is currently practising as a sole-proprietor in Ong Cheong Wei Law Chambers.
Investigations revealed that Ong Cheong Wei did not prepare or maintain any general ledger or accounts for OCWC. For YAs 2007 and 2008, Ong Cheong Wei filed his tax returns (Form B1) based on an estimation of his income, knowing that the actual amount earned was more than the estimated amount. His estimation was based on the assumption of a net monthly income of about $4,000 per month.
Ong Cheong Wei pleaded guilty to two charges of tax evasion, with a further two charges for making false entries in his Income Tax Returns being taken into consideration for sentencing. The Court sentenced him to 4 weeks’ jail and ordered him to pay a penalty of $118,341.78.
IRAS Warns Against Tax Evasion
IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who wilfully evade tax. Taxpayers are also ultimately responsible for the information declared in their income tax returns. The authority will not hesitate to bring offenders to court. Penalties for tax evasion can be up to four times the amount of tax evaded. Jail terms may also be imposed.
Reporting of Malpractices
Businesses or individuals are encouraged to immediately disclose any past tax mistakes. IRAS will treat such disclosures as mitigating factors when considering action to be taken. Those who wish to disclose past mistakes, reveal evaded taxes, or report malpractices that might indicate tax evasion, can write to:
Inland Revenue Authority of Singapore Investigation & Forensics Division 55 Newton Road, Revenue House Singapore 307987
Cash Rewards for Informant
A reward based on 15% of the tax recovered, capped at $100,000, would be given to informants if the information and/or documents provided lead to a recovery of tax that would have otherwise been lost. All payments are at the discretion of the Comptroller. IRAS would ensure that the identities of informants are kept strictly confidential.
Inland Revenue Authority of Singapore