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Ong Boon Lee, 48, is the first certified public accountant (CPA) in Singapore to be charged for assisting a company, Darma Consultants Pte Ltd, to evade income tax.

Darma, which is in the business of supplying engineers to oilfield companies, was convicted for claiming fictitious expenses and under-reporting its profits in the income tax returns for the Years of Assessment (YA) 2005 and 2006. Darma was ordered to pay a penalty totalling S$37,096 (US$29,132), three times the amount of tax undercharged, and a fine of S$6,000 (US$4,711) for the two offences. In addition, five other similar offences committed during 2000 to 2004 have been compounded by the Comptroller of Income Tax.

Ong, who owns Benedict & Associates, allegedly helped Darma set up a shell company in British Virgin Islands (BVI). As Darma’s accountant, Ong then allegedly falsified expenses of S$86,528 (US$67,953) in Darma’s income tax returns for the Years of Assessment 2005 and 2006, purportedly as payments made to the shell company in BVI.  The total amount of tax undercharged was S$12,365 (US$9,710).

IRAS has developed the capability to detect and uncover sophisticated tax fraud even in cases involving offshore companies. “We use a variety of specialised computer forensic tools and techniques to uncover evidence in our investigation. Our officers’ experience in detecting sophisticated fraud activities and expertise in forensic accounting also played a big part in helping to unravel the case,” says Wilson Ong, Assistant Commissioner, Investigation and Forensics Division.

Errant Tax Agents

Under Singapore's tax laws, a person who assists anyone to evade tax by falsifying any books of account or records or by use of any fraud is liable to a penalty of up to 4 times the amount of tax evaded, a fine of not exceeding S$50,000 or to  imprisonment for a term not exceeding 5 years or both.

In general, IRAS takes a serious view of such offences by errant tax agents. Tax agents have extensive knowledge and understanding of tax laws and are responsible for giving tax advice to help taxpayers fulfil their tax obligations. IRAS believes that majority of them perform their duties professionally. IRAS will not hesitate to take harsh actions against those who help their clients evade taxes or abuse the tax system.

In Singapore, tax evasion and tax fraud are criminal offences punishable under the law and the court imposes severe penalties for such offences.

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