Tax investigators nab 10 with new Iras powers
Using its new powers of arrest, the taxman targeted 73 locations to arrest suspected perpetrators of GST fraud
Tax investigators have invoked newly acquired powers of arrest for the first time, nabbing 10 people suspected of being key members in a criminal syndicate engaged in goods and services tax (GST) fraud.
The goods suspected to be involved were hard disks.
Raiding 36 businesses and 73 locations on Oct 23, Oct 24, Tuesday and yesterday, the Inland Revenue Authority of Singapore (Iras) said the island-wide operation was targeted at syndicates suspected of perpetuating GST carousel fraud.
Iras investigators conducted simultaneous raids at locations including Kallang Pudding, Tampines and Choa Chu Kang, seizing business records and about 200 electronic devices.
Forty-one individuals are assisting with investigations.
Iras said GST carousel fraud generally involves having goods traded through contrived supply chains before they are eventually exported.
For example, Company A buys the goods and sells them to Company B, charging and collecting GST from Company B.
But instead of paying the GST to Iras, Company A's director, the fraudster, would go missing.
The goods are then sold to bogus businesses acting as buffer companies before finally being exported.
The exporting company would then seek a refund on the GST amount it paid on the goods - GST the tax authority never received in the first place.
The same goods can be imported again and recycled through new supply chains.
In some instances, no goods are actually exported and the business transactions are merely paper exercises. There are also cases where some of the supposedly exported goods are sold here without GST.
"While these supply chains involve seemingly unrelated multiple companies, they are typically controlled by one mastermind," Iras said.
To help deal with such syndicates, Iras officers were given powers of arrest at the start of the year after amendments to the GST Act were passed last November.
Assistant commissioner of Iras' investigation and forensics division, Mr Lawrence Eng, said in a statement yesterday: "Some suspects can be very uncooperative; they try to destroy paper documents or refuse to hand over evidence.
"With our new powers of arrest, our investigators can be more effective in bringing the perpetrators to justice."
Those who wilfully intend to evade or assist another person to evade GST face a penalty of up to three times the amount of tax undercharged, a fine of up to $10,000, and/or jail for up to seven years.