Tax Evasion Offences Detected and Adequacy of Deterrent Measures in Place

Mr Zhulkarnain Abdul Rahim asked the Deputy Prime Minister and Minister for Finance (a) in each of the past three years, what is the number of tax evasion offences detected; (b) what are the steps and measures in place to detect and prevent such offences; (c) whether the current reward for whistleblowing or penalties are sufficient for deterrence; and (d) if not, whether the Ministry intends to review the reward and penalties in the future.

From FY2019 to FY2021, the Inland Revenue Authority of Singapore (IRAS) investigated a total of 465 cases of tax evasion: 141 in FY2019; 192 in FY2020; and 132 in FY2021.

IRAS proactively detects tax evasion cases through its combination of data analytics, intelligence gathering, tax audit and reporting by whistleblowers. Once identified, IRAS subject cases to rigorous audit and investigation to determine whether tax offences have been committed. Where IRAS has established that tax evasion offences have been committed, IRAS will not hesitate to initiate Court proceedings to prosecute the taxpayer and/or the abettors. Those found guilty of tax evasion may face a penalty of up to four times the amount of tax evaded, a fine not exceeding $50,000, and/or imprisonment of up to seven years.

Whistleblowers are able to receive a reward of 15% of the tax recovered, capped at $100,000, if the information provided leads to a recovery of tax that would have otherwise been lost. In practice, most whistleblowers are not motivated by rewards. Most do not request, and thus do not receive, the reward for making tip-offs.

Taken together, the penalties for non-compliance and rewards for whistleblowers have contributed to keeping tax evasion cases low.