Remisier jailed for tax evasion

(22-11-2012, 08:15 PM)d.o.g. Wrote:

(22-11-2012, 07:51 PM)CityFarmer Wrote: $676,216 brokerage fee is equivalent to approx $270 millions transaction volume in a year (with average 0.25% rate). She is either a successful remisier with successful traders as customers, or she is betting heavily herself.

Since she is not able to pay the $185,000, i tent to agree that she loss most if not all of her money in her trades.

$676k in income, assuming she has a 40% share, means commissions earned by Phillip Securities were $1.69m. For large clients the commission rate can be 0.15% or lower. Let's use 0.15%. That means trade value was $1.13bn!!! Assuming 250 trading days per year, that means that on average she cleared $4.5m of trades per day. It points to massive clients, massive contra trades, or some combination of the two.

Yes, the $676k is only her part of brokerage fee. I should include her company share in my previous derivation.

(22-11-2012, 06:51 PM)specuvestor Wrote:

(22-11-2012, 06:22 PM)WolfT Wrote: I would rather go to jail too to save the $185,849.
Free food and stay.

That depends on 1) How old you are ie opportunity cost 2) declaration in all your job applications and membership 3) not interesting in public office in any form

Her jail term is short. If stays clean for five years after release, the criminal record would be spent.
http://www.spf.gov.sg/epc/rscr/help.htm

Full article here.

The Straits Times
www.straitstimes.com
Published on Nov 23, 2012
Remisier jailed for tax evasion
She dodged $64,309 in income tax by making false entries in her returns

By elena chong

A REMISIER who under-reported her income to the taxman was jailed for a week and ordered to pay a penalty of $192,927 yesterday.

Teo Joo Hiang, 52, admitted to two charges of making false entries in her income tax returns for the years of assessment 2009 and 2010.

This is the first case where a remisier has been charged under the Income Tax Act for tax evasion.

She was unable to pay the penalty, which is three times the amount of tax evaded, and will have to serve an additional five months and two weeks in jail.

Investigations showed that she had declared a brokerage income of $417,084, which was significantly lower than the $945,474 brokerage income she earned from Phillip Securities. She had evaded a sum of $64,309 in taxes.

The Inland Revenue Authority of Singapore's (Iras) prosecutor Vikna Rajah said the self-employed remisier made a false entry in each of the returns of income for the years of assessment (YAs) 2009 and 2010.

For YA 2009, she declared her income as $158,920 when in fact it was $269,258; and for YA 2010, $258,164 instead of $676,216.

This resulted in her being assessed to pay a lower amount of income tax.

Two other charges were withdrawn and compounded, for which she paid an additional $93,380 financial penalty.

Her lawyer Harbajan Singh said she had learnt a very painful lesson and had rendered full cooperation to the tax authorities.

In a statement yesterday, Iras reminded remisiers that they should include all income such as brokerage income, performance bonus and bad debts recovered in their tax returns.

They should claim only for tax deductions in respect of expenses that are incurred wholly and exclusively to produce their income.

These may include bad debts that are written off and entertainment expenses. Claims for such expenses must be supported by invoices and receipts or other relevant documents.

Teo could have been fined up to $10,000 and/or jailed for up to three years on each charge, as well as ordered to pay a penalty of treble the amount of tax undercharged.

elena@sph.com.sg

I am just curious what take the authority so long to find out since all the3 transaction records can be traced from the brokerage automatically.

(23-11-2012, 09:15 AM)corydorus Wrote: I am just curious what take the authority so long to find out since all the3 transaction records can be traced from the brokerage automatically.

The IRAS don't conduct 100% check on tax filings. They might have the system to flag out inconsistencies, but investigation usually comes much later. When they discover improprieties in the course of their risk-based audits, they will investigate the back years. That is when everything comes out in the open.

For remisiers, it might be a case where bad debts were claimed deduction in the past, but subsequent recoveries were not brought back to tax. Or some remisiers might be tempted to claim trading losses against their income; or claim entertainment expenses spent on their high net-worth clients that are not well supported. But these are speculations as I've special insights to this particular case.

IRas always wait for few more years to take action, because more years=more evasions=more penalty. Better harvest for IRAS.

(23-11-2012, 01:05 AM)Muck Wrote:

(22-11-2012, 06:51 PM)specuvestor Wrote:

(22-11-2012, 06:22 PM)WolfT Wrote: I would rather go to jail too to save the $185,849.
Free food and stay.

That depends on 1) How old you are ie opportunity cost 2) declaration in all your job applications and membership 3) not interesting in public office in any form

Her jail term is short. If stays clean for five years after release, the criminal record would be spent.
http://www.spf.gov.sg/epc/rscr/help.htm

But that's not how you declare it, if you examine the declarations carefully, unlike the declaration on "undischarged" bankrupt. Those who have been jailed will have a black mark for life. Just like if you've been sanctioned by MAS. Theoretically there is a time period.

(23-11-2012, 10:54 AM)cfa Wrote: IRas always wait for few more years to take action, because more years=more evasions=more penalty. Better harvest for IRAS.

Yes, and Singapore government is always very thorough. When they nail you they will make sure they have all the evidence. For eg the infamous underaged prostitute case took more than 2 years before charges were filed. A friend's friend was secretly "stalked" for more than 18 months before his HDB was seized for illegal rental.

(23-11-2012, 09:52 AM)wee Wrote:

(23-11-2012, 09:15 AM)corydorus Wrote: I am just curious what take the authority so long to find out since all the3 transaction records can be traced from the brokerage automatically.

The IRAS don't conduct 100% check on tax filings. They might have the system to flag out inconsistencies, but investigation usually comes much later. When they discover improprieties in the course of their risk-based audits, they will investigate the back years. That is when everything comes out in the open.

For remisiers, it might be a case where bad debts were claimed deduction in the past, but subsequent recoveries were not brought back to tax. Or some remisiers might be tempted to claim trading losses against their income; or claim entertainment expenses spent on their high net-worth clients that are not well supported. But these are speculations as I've special insights to this particular case.

In industies with a lot of paper /computer records trails,it is difficult to escape as Iras has a Computerised model of low to middle to top earners.
They also do random audits even for those earners who are within the average income rangel
On top that,whistle blower with documented evidence for successful
prosecution of tax evader is entitled to 10% reward of the evaded tax
so do not create enemies or be too mean