Undertaker gets jail, fine and S$340,000 penalty for tax offences in fourth such case

SINGAPORE: A 64-year-old undertaker was sentenced to 21 weeks' jail, a penalty of over S$340,000 (US$250,000) and a fine of S$3,000 for tax offences on Monday (Jan 6).

Tee Siew Gim is the fourth undertaker to be hauled to court for tax offences since authorities started scrutinising the funeral industry.

In 2019, the Inland Revenue Authority of Singapore (IRAS) started investigating the funeral sector and related services such as religious services, embalming, the provision of tentage and furniture, and food catering.

The agency has audited and investigated 65 businesses for anomalies in tax reporting to date.

In the last five years, IRAS has clawed back more than S$3 million in unpaid taxes and penalties from about 49 firms in the funeral industry.

Small businesses like funeral operators have practices that involve substantial cash transactions, no or poor record-keeping, and weak internal controls and processes, IRAS said in a press release.

Such businesses are observed to be at higher risk of failing to comply with tax requirements by, for example, filing incorrect income tax returns and failing to register for Goods and Services Tax (GST) on time. A business is required to register for GST when its taxable turnover over a 12-month period exceeds S$1 million.

CNA looks at the four undertakers who have been prosecuted for tax offences.

TEE SIEW GIM OF HOCK HIN UNDERTAKER

Tee was the partner of Hock Hin Undertaker, which has been in business since 1965, according to the company's website.

He was also the sole proprietor of Eternal Bereavement Services and involved in another partnership, Century Paper Company.

According to IRAS, Hock Hin Undertaker was one of three funeral operators the agency raided in September 2019 during an operation that covered more than 10 locations islandwide.

Tee was found to have falsely declared his income in his tax returns for the years of assessment (YA) 2018 and 2019. Investigations showed he did this with wilful intent to evade taxes.

In April 2018, he reported a total income of S$146,673 when his income was actually S$374,646. This resulted in him being undercharged S$43,705.78 in taxes.

The next year, his reported income was S$162,862 while his actual income was S$443,177. He was undercharged by S$57,924.46.

Tee also failed to notify the comptroller of GST of his liability to register Hock Hin Undertaker. The firm was due to pay S$364,370.30 in GST.

Hock Hin Undertaker's revenue first exceeded S$1 million for four consecutive quarters on Mar 31, 2014. Tee was required to notify the comptroller of GST within 30 days, but did not do so.

Tee pleaded guilty to these three charges, while another 15 charges were considered in sentencing.

According to the other charges, Tee was undercharged a total of almost S$113,000 in taxes after falsely declaring his income from YA2014 to YA2017.

Tee also admitted to helping an individual named Tan Ah Kiew evade more than S$152,000 in taxes from YA2014 to YA2019.

He did this by instigating one Han Hock Chou of Han Secretarial & Management to make false entries in Tan's tax returns.

Tee helped another individual named Tee Siew Kheng evade more than S$22,000 in taxes in a similar manner from YA2015 to YA2019.

Defence lawyer Tan Jun Yin said her client had made good the full amount of taxes he owed to IRAS.

She asked for Tee's prison sentence to start on Feb 3 so that he could spend Chinese New Year with his family.

She also asked the court to allow Tee to pay his penalty of S$341,327.75 in instalments over one-and-a-half years, as he had less cash on hand after converting his business from a sole proprietorship to a private limited company.

District Judge Wong Li Tein granted both applications by the defence.

ROLAND TAY OF DIRECT FUNERAL SERVICES

Undertaker Roland Tay Hai Choon is well known for providing pro bono funeral arrangements for murder victims.

Last September, the 77-year-old was fined S$12,000 and ordered to pay a penalty of more than S$529,000 for tax offences.

Roland Tay was a partner of Direct Singapore Funeral Services & Embalming at the time of the offences.

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

His employee, 80-year-old Pang Toon Jim, did bookkeeping for some of his businesses.

Roland Tay got Pang to fill in the personal income tax return forms on his behalf for YA2011 and YA2012, and he signed off on the forms. In YA2013, he filed his income tax returns online.

In all three years, his annual income exceeded S$500,000. But his income was underreported as being S$121,051, S$138,976 and S$81,766 respectively.

As a result, he was undercharged a total of more than S$250,000 in taxes across the three years.

Investigations also revealed that the total value of Roland Tay's businesses' taxable supplies for four consecutive quarters exceeded S$1 million on Jun 30, 2010.

He was required to notify the comptroller of GST of his liability to register for GST by Jul 30, 2010, but did not do so, and owed almost S$287,000 in taxes as a result.

The offences were uncovered through IRAS' audit programme. Roland Tay made full restitution of the amounts owed.

His defence lawyers argued that he lacked financial knowledge and "relied entirely" on Pang.

They also said he had ensured compliance in the future as he had corporatised his business, which was being run by his family members.

GRACE TAY OF GRACE CASKET

Grace Tay, the 40-year-old owner of Grace Casket, was jailed for 25 days and fined almost S$75,000 for tax evasion in December 2022.

Grace Casket acted as a contractor, selling funeral packages and outsourcing jobs to suppliers in the undertaker business.

At the same time, Grace Tay also earned a monthly salary working for her parents' business, Teck Hin Undertaker.

She admitted to purposely reporting only what she earned from Teck Hin Undertaker in her income tax returns for YA2018.

She omitted a total of more than S$600,000 in income from her returns from YA2017 to YA2019, resulting in her being undercharged almost S$57,000 in taxes.

The omissions reportedly came to light only when IRAS audited Teck Hin Undertaker.

When IRAS interviewed Grace Tay in relation to this audit, she disclosed her ownership of Grace Casket but claimed that "business was minimal" and that she was not active in it.

Investigators later found out that she had not been truthful and that Grace Casket was actually "thriving".

The judge reportedly found that Grace Tay was "no babe in the woods" and that her omission of her income was "not a technical or accidental oversight".

WILLIAM QUEK OF UNION CASKET

William Quek Soo Chek is the owner of Union Casket, which has been in business since 1994, according to its website.

In March 2019, the 60-year-old was ordered to pay fines and penalties totalling almost S$257,000, and backdated taxes amounting to more than S$132,000.

He admitted to submitting incorrect information in his GST registration form and his income tax returns for YA2011.

In 2006, Quek applied to register Union Casket for GST, but incorrectly stated that the business' taxable supplies exceeded S$1 million in the quarter ending December 2005.

In fact, the business exceeded the S$1 million threshold in December 2002. Had this gone unchecked, Quek would have evaded more than S$123,000 in tax.

In April 2011, Quek also incorrectly included private car expenses as part of deductible expenses in his returns to lower his tax liability and evade over S$3,100 in tax.