Different ways of getting whack for tax violations

S. Sharma, in today’s BT, who is now a partner at the law firm KhattarWong (but was senior legal officer at IRAS), highlighted the difference in how prospective tax evaders are being investigated, examined and prosecuted, depending on whether it is income tax OR goods and services tax (GST) violation.

What is the difference?

  • For income tax violations,

The IRAS conducts its own investigation, obtains approval from internally to institute the prosecution and conducts the proceedings in court without any talking to the Attorney-General or any Deputy Public Prosecutor.

  • For GST violations,

Under Section 69 of the GST Act, a prosecution for GST evasion requires the sanction of the Public Prosecutor alone, and not the Comptroller of GST, unlike income tax evasion.

Why the difference in treatment?

Is it because GST monies are deemed to be state assets “stolen” by the tax violators? Whereas income taxes are “contributions” from tax payers for nation building.

As to Mr Sharma, the “why” is not important. He has requested the relevant authorities to harmonise the difference.

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