2 S'porean men, aged 45 & 51, fined S$2.6 million for evading duty & GST on imported vehicles

Two Singaporean men have been handed fines of more than S$2.6 million.

They were found to have under-declared the values of motor vehicles, fraudulently avoiding excise duties and Goods and Services Tax (GST), and shortchanging the Additional Registration Fee (ARF) owed at the point of vehicle registration.

Fraudulent duty evasion

According to a joint news release by Singapore Customs and the Land Transport Authority (LTA) on Apr. 20, 51-year-old Desmond Phang Boon Wee pleaded guilty to two consolidated charges of fraudulent duty evasion under the Customs Act.

On Apr. 20, he was sentenced to a fine of S$1.362 million for suppressing the declared values of 142 vehicles imported by Metalox Autos Pte Ltd (Metalox) between January 2021 and January 2022.

This resulted in duty losses of approximately S$185,477.

Two consolidated counts of GST evasion totalling around S$77,901 for the same vehicles, and separate duty and GST evasion charges of approximately S$3,476 linked to a vehicle imported in December 2020, were taken into consideration during sentencing.

Phang failed to pay the fine and will serve 27 months’ jail by default.

Second man

The second man, Loke Chern Meng, 45, was sentenced on Mar. 6, 2023, to a fine of slightly more than S$1.298 million for charges similar to Phang’s.

Loke's role was to facilitate the scheme by allowing Phang to run Metalox.

He too did not pay the fine and served 26 months’ imprisonment by default.

Both men were also given five-week jail sentences for understating vehicle values during registration with LTA across 139 vehicles.

Each pleaded guilty to two consolidated charges under the Road Traffic Act for providing false information regarding the values of 130 motor vehicles, with charges relating to a further nine vehicles taken into account during sentencing.

The combined ARF shortfall amounted to S$1,348,620, and both offenders were ordered to pay the same to LTA.

Elaborate scheme

According to the news release, Singapore Customs launched an investigation into Metalox after suspecting that the Declaration of Facts (DOF) submissions for duty and GST assessments had been falsified.

Phang had set his sights on acquiring Metalox in 2020 to import vehicles at artificially low declared values, thereby minimising his duty and GST liabilities.

To avoid legal liability, he recruited Loke to serve as the company's registered director and sole shareholder, offering him a fee of S$200 per imported vehicle.

Loke agreed to the arrangement and allowed Phang full control over the business, including access to Metalox’s CorpPass account and pre-signed cheque books.

Phang then proceeded to identify local buyers, place orders with overseas suppliers, and obtain doctored invoices that reflected prices lower than what was actually paid.

He submitted these falsified documents to Singapore Customs as supporting documents in the DOFs.

Phang split his supplier payments into two components — one reflecting the false invoice amount, and a separate undisclosed payment covering the balance.

In total, the under-declaration of 143 vehicles between December 2020 and January 2022 resulted in unpaid duty and GST of approximately S$266,854.

Penalties

Under the Customs Act, individuals convicted of fraudulently evading any duty or GST on imported goods may face fines of up to 20 times the amount of duty and GST evaded, imprisonment for up to two years, or both.

Under the Road Traffic Act, anyone found to have provided false information affecting the ARF payable may be fined up to S$10,000 or imprisoned for up to six months, with maximum penalties doubled for amalgamated charges under the Criminal Procedure Code.

Courts are also empowered to order repayment of any ARF shortfall to the LTA.

Members of the public with information on smuggling activities or evasion of duty or GST are encouraged to report it here.

Top photos from Canva