Koh Kok Huat (“Koh”) and Adrian Yeo (“Yeo”), directors of both Foster Asia Pacific Pte Ltd (“Foster Asia”) and Ematco Industrial Pte Ltd (“Ematco”), were found guilty of evading income taxes by not declaring company bonuses received.

Koh and Yeo faced three charges for making false entries in their income tax returns with the wilful intent to evade tax. They each pleaded guilty to one charge with two other similar charges taken into consideration for the purposes of sentencing. Koh was sentenced to 3 weeks’ imprisonment and a penalty of $93,086. In July 2019, Yeo was similarly sentenced to 3 weeks’ imprisonment and a penalty of $68,797. The penalties imposed on Koh and Yeo were three times the amount of tax evaded with respect to the charges that each of them had pleaded guilty to.

Facts of the Case

Koh and Yeo would decide how much bonus was to be paid to themselves. The financial manager of the companies would then prepare the corresponding payment vouchers and cash cheques for Koh and Yeo. The cash cheques would then be given to Koh and Yeo, who would proceed to cash the cheques. The payment vouchers stated that these bonus payments were for supposed “subcontractor fees” (when this was not actually the case). The financial manager would also book these bonus payments under the “sub-contractor fees” account in the businesses’ financial records.

Koh and Yeo, with the wilful intent to evade tax, did not report the bonuses from Foster Asia and Ematco as employment income in their personal income tax returns. For Years of Assessment (YAs) 2011 to 2013, Koh and Yeo did not declare bonuses totalling $337,000 and $280,360 respectively. This had resulted in $64,805 and $49,680 in taxes undercharged for Koh and Yeo.

IRAS Warns Against Tax Evasion

IRAS takes a serious view of non-compliance and tax evasion. There will be severe penalties for those who wilfully evade tax. The authority will not hesitate to bring offenders to court. Offenders may face a penalty of up to four times the amount of tax evaded. Jail terms may also be imposed.