THE taxman is getting tough on hawkers, many of whom have been caught under-declaring their earnings.
More checks will be done on them, following an audit that uncovered a variety of lapses ranging from poor record keeping to false claims for 'expenses' such as personal holidays.
The Assistant Commissioner of the Individual Income Tax Division, Mr James Khor, told The Straits Times last night that the ongoing audit on hawkers and others in the food and beverage (F&B) industry revealed these 'common findings':
Under-declaring of incomes;
Claiming for personal expenses such as household bills, private entertainment or even what family members spent on holidays;
Not keeping business records or having incomplete records; and
Reporting sales takings and claiming expenses based on estimates, without proper documentation.
The Inland Revenue Authority of Singapore (Iras) did not give further details, or reveal how many hawkers are involved in its audit. But a Straits Times report in April had stated that over 50 players in the food industry were being audited then.
At the time, a dozen hawkers and companies running food stalls had already been hauled up for trying to evade income tax.
One of them was a hawker who made about $4 million over six years, but declared only half that amount. The man was fined more than a million dollars.
And last Friday, Looi San Cheng became the first hawker here to be put behind bars for tax evasion.
Looi, who sold his famous Tip Top curry puffs from his Ang Mo Kio stall, made $1.06 million over six years. But he declared profits of only $2,800 between 2001 and last year.
The 63-year-old was jailed for two weeks and fined $196,000. Four other charges against him were withdrawn after he paid another $291,000 to compound them.
It is understood that more hawkers may be headed for the courts. Those convicted of tax evasion have to pay a penalty equal to three times the tax lost by Iras. They can also be jailed up to three years and fined up to $10,000.
But it is not too late to come clean, said Iras.
Mr Khor urged taxpayers who have omitted certain incomes, or over-claimed certain expenses in the past to own up. Taxpayers can call 6351-3481 or 6351-3090, or e-mail ksgoh@iras.gov.sg or vivianseah@iras.gov.sg to make voluntary disclosures.
For hawkers who need help filing their returns, the Iras has come up with a customised guide for taxpayers in the F&B industry.
In the next two months, it will be holding dialogues with various hawkers and merchant associations.
Those who want to report malpractice can e-mail Iras at iid@iras.gov.sg
