SINGAPORE: The sole director of a freight forwarding company was jailed and fined over S$4 million on Thursday June 23 for evading goods and services tax (GST) and falsifying documents.
Ho Shyan Tien, a Singaporean, committed the acts 632 times between 2015 and 2019 by providing false values of goods imported by his customers to a declaring agent, Singapore Customs said on Friday.
The total amount of GST evaded was S$1,252,100.18.
The 44-year-old director of Sea-Net Cargo Express (S) pleaded guilty to three counts of fraudulent GST evasion involving 327 false invoices and three others for falsifying documents. Six other counts were considered at sentencing.
He was sentenced to eight months’ imprisonment and a total fine of S$4,419,000.
In June 2019, the Inland Revenue Authority of Singapore (IRAS) found discrepancies in Cargo Clearance Permits (CCPs) during a verification of the GST declaration made by one of Ho’s customers, who is an importer.
CCPs are required to account for the importation and payment of taxes of goods, and a declaration must be made to Singapore Customs electronically to obtain a permit. The GST owing would then be paid to the state.
After discovering the discrepancies, IRAS sought the assistance of Singapore Customs to verify the amount of GST paid by the importer.
“It was found that the GST amounts shown in the importer’s copy of the CCP were higher than what was in the Singapore Customs records. Further verification with the importer showed that the importer had paid the GST amounts shown in their copy of the CCP,” Customs said.
Singapore Customs investigations into Sea-Net showed that Ho masked the original values of his customers’ commercial invoices by pasting altered values on them.
He then photocopied the falsified invoices and provided them to a declaring agent to request customs clearance.
“There were also occasions where Ho received commercial invoices from customers in an editable document, which allowed him to edit values directly,” Singapore Customs said.
The declaring agent would pay the GST to customs based on Sea-Net’s documents and invoice the company for the amount of GST paid.
Once the clearance permit was approved, the agent sent the permit to Sea-Net.
“Ho’s actions resulted in under-declaration of goods values and under-payment of GST to Singapore Customs,” the agency said.
To conceal his scheme, Ho changed the values and GST amounts shown in the approved permits before providing them to his clients.
“It gave its customers the impression that the correct amounts of GST were being paid at Singapore Customs,” the agency said.
Ho would then profit from the difference between the amount of GST collected from its customers and the lower amount of GST paid through the reporting agent.
Singapore Customs advises importers to verify declarations to the agency made on their behalf by their freight forwarders or declaring agents using their Unique Entity Number (UEN).
“To guard against fraud, merchants may wish to sign up for the Merchant Notification Service to receive notifications of permit declarations made using their UEN. Notifications include information on the total amount of duty and/or GST payable,” Singapore Customs said.
“Any person involved in any way in the fraudulent evasion or attempted fraudulent evasion of duty shall be guilty of an offense and shall be liable on conviction to a fine not exceeding 20 times the amount of duty and GST evaded,” Customs said, adding that falsifying documents is a serious offence.
Violators can be fined up to S$10,000 and/or jailed for up to 12 months.