SINGAPORE: A court on Thursday (Sept 5) fined prominent funeral director Roland Tay Hai Choon 12,000 Singapore dollars (9,200 US dollars) and ordered him to pay a fine of more than 529,000 Singapore dollars for tax offences.

Incorrect tax returns led to underpayments of more than S$250,000 in tax over three tax years, while failure to register for Goods and Services Tax (GST) when his company’s taxable supplies exceeded S$1 million for four consecutive quarters resulted in a total GST arrear of almost S$287,000.

Tay, a 77-year-old Singaporean known for organising free funerals for murder victims, pleaded guilty to four charges under the Income Tax Act (GST), including filing incorrect personal income tax returns and failing to register for GST.

The court heard that Tay was a partner in Direct Singapore Funeral Services & Embalming at the time.

He was also the sole owner of five other businesses: Hindu Casket, Tong Aik Undertaker, All Saints Care Services, 24 Hours Direct Casket and Defu Veterinary Clinic.

Tay had an employee who handled the accounting for some of his companies – 80-year-old Pang Toon Jim.

For the 2011 and 2012 tax returns, Tay provided Pang with personal income tax return forms, known as Form B, to complete on his behalf.

Form B requires a taxpayer to report, among other things, income derived from a trade, business occupation, or vocation. This includes providing information about revenue, gross profit or loss, allowable business expenses, and adjusted profit or loss for the businesses in question.

Pang completed Form B for 2011 and 2012, and Tay signed it and submitted it to the Inland Revenue Authority of Singapore (IRAS).

However, the investigation found that the information contained in the returns for those two years was inaccurate and did not fully reflect the income and expenses of Taya’s businesses.

The returns also exclude profits Tay made from the two businesses in 2011 and 2012, respectively.

In the 2011 tax year, he reported income of S$121,051 when his actual income was S$539,599. As a result, he underpaid tax of S$76,070.10.

In the 2012 tax year, he reported income of S$138,976 when his actual income was S$583,239. As a result, he underpaid tax of S$83,551.80.

For his 2013 tax return, Tay filed his taxes online but also failed to fully report his businesses’ income and expenses. He also failed to report Defu Veterinary Clinic’s losses.

In the 2013 tax year, he reported income of S$81,766, when his actual income was S$588,645. As a result, he underpaid tax of S$90,690.59.

Tay also failed to notify the GST Controller of his requirement to register for GST purposes.

The investigation revealed that the total value of the companies’ taxable supplies for four consecutive quarters exceeded S$1 million as at June 30, 2010.

He was required to notify the Comptroller of GST of his registration requirement by July 30, 2010, but failed to do so. As a result, he failed to account for GST from the quarter ended December 31, 2010, through the quarter ended September 30, 2013, tax prosecutors said.

The net amount of GST payable for Tay’s failure to register for GST was Singapore dollars 286,962.97.

CRIMES DISCOVERED BY IRAS AUDIT

IRAS said in a statement that the offences were detected as part of an audit programme, adding that it regularly conducts audit programmes across industries to ensure tax compliance by individuals, companies and the self-employed.

Tay has already made full amends.

The prosecutor’s office demanded a fine and mandatory monetary penalties.

Tay was represented by lawyers from Jacob Mansur & Pillai, who said Tay was “very poorly educated and had no understanding of financial matters.”

“He relied entirely on Pang, the assistant. He failed to exercise due diligence on Pang, and as a result, mistakes were made without just cause,” the lawyer said.

He said Tay’s knowledge was “so limited” that he did not take the losses into account when filing his tax returns.

He said Tay was “suffering from poor health” and had ensured future compliance by converting his business into a partnership, which is now run by members of his family.

The defence said Tay also co-operated with IRAS, made full restitution and undertook charitable activities as part of his business activities.

They requested that Tay be allowed to pay the fine in instalments, taking into account its amount.

District Judge John Ng said instalments are usually granted if half the sum is paid up front and the other half over six months. However, given the “huge” and “significant” sums involved, he said he was prepared to allow up to a year and a half to pay the full sum.

If Tay is unable to pay the S$12,000 fine, he will have to serve 12 weeks in prison in default. If he fails to pay, he will have to serve 32 months in prison.