A 40-year-old former businessman, Edwin Pang Chung Jie, became the first person to be charged for failing to register for Goods and Services Tax (GST) for online sales, on Friday (Oct. 30).

According to a media release by the Inland Revenue Authority of Singapore (IRAS), there are severe penalties for tax evasion, and offenders may be brought to court, where they may face a penalty of up to four times the amount of tax evaded, or possibly a jail term.

Tax involved amounted to S$129,411

Pang used to own two sole-proprietorships, Edmobile and Moogi, both of which sells mobile phones and mobile phone accessories online.

He made a number of online sales on various online shopping platforms, including Lazada, Shopee, Qoo10 and Carousell, without registering for GST.

Pang also faced two charges for submitting incorrect income tax returns without reasonable excuse, and another two charges for failing to keep proper records of invoices received by him in relation to his sole-proprietorship's businesses.

According to IRAS, the total tax involved amounted to S$129,411.

There is a reward for informants who provide information on tax evasion

Between 2015 and 2019, IRAS recovered more than S$3.8 million in taxes and penalties from 65 audit cases on taxpayers who operate online businesses.

Some of the compliance issues include the omission of income derived from online business for income tax, making claims made for businesses expenses that are not tax-deductible, and failing to register for GST when the business's 12-month taxable turnover has exceeded S$1 million at the end of the calendar year.

According to IRAS, there is a reward on 15 per cent of the tax recovered, capped at S$100,000, for informants that provide information or documents that lead to a recovery of tax that would have otherwise been lost.

Businesses or individuals are also encouraged to immediately disclose any past tax mistakes, and IRAS will treat such disclosures as mitigating factors when considering action to be taken.

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