You might have heard some Aunties and Uncles say “Don’t be like them” to kids when passing by sweating hawkers and angry fruit sellers.
Bet they won’t be saying that anymore after knowing that a single Durian stall can generate over S$1 million revenue per year.
Ah Seng Durian, the Durian stall in Ghim Moh owned by the Shui brothers that Westies will point to for good durians, did exactly that…
…except they didn’t report it to our favourite tax collector IRAS.
Turns out, the two brothers who own the stall under-declared income by about S$708,000 for 6 years, which is about S$161,600 in taxes they didn’t pay.
They also didn’t register for GST, which is a requirement for businesses when revenues exceed S$1 million.
Some of the undeclared income seemed to have been used to finance mortgage payments for properties in Malaysia.
Possible Jail Term
Although the brothers share equal profits, they are sentenced separately as the older brother is the actual managing partner and the one doing the accounting for the business.
On 3 May 2019, Friday, the younger brother was fined $10,000 and ordered to pay a penalty of $46,303.14.
The older brother’s sentence will be decided on 7 May 2019. Other than the requisite penalties, prosecution is also asking for a fine of S$5000 to S$7000 and a jail term of four to eight weeks.
How Did This Happen?
Really, it isn’t super hard to see why.
You go to any old Uncle or Aunties and shout the word “accounting”, they will probably be shocked from your shouting, and also tell you it’s some super hard thing they don’t know how to do.
And that is the exact scenario.
In 1999, the Shui brothers inherited a mini-mart Shanghai Moh Lee Seng when their father passed away. The previous accountant then retired, and the older brother, who is 60 years old now, became the accountant for the business.
This is despite having no accountancy training or knowledge.
They then changed business to Ah Seng Durian (officially Seng Chung Trading) on 20 Feb 2012 when it stopped operating after an En Bloc sale. Before this, the mini-mart’s turnover had also went over the S$1 million threshold on 31 Dec 2006.
Now, remember: any revenue above $1 million must be GST-registered.
To understand how incompetent they are at counting money, they used a single bank account for both their private and business matters. Not only that, they didn’t have a fixed method for keeping track of money going in and out.
They even threw away documents for their mini-mart after the En Bloc for reasons unknown.
There’s a larger problem: Financial Illiteracy
Other than Ah Seng, Kay Lee and Tip Top Curry Puff (yes, that curry puff) were also hawkers who were charged for tax evasion.
Like most hawkers, they were likely financial illiterate. They just happened to be one of the higher earning ones and that resulted in this mess.
Investigations for the Shui brothers’ tax offences started in 2014, and they have actually hired a professional accountant after that. Though, it is unclear how this helped with their tax situation.
Rather than going on a witch hunt for hawkers to O$P$, it would make more a whole lot more sense to actually educate hawkers on money matters.
Instead, the IRAS had to issue cash rewards for tax evasion informants and the prosecution had to suggest a jail term.
I’m all for punishments, as long as it is fair and actually solves the damn problem. So unless “jail term” is a reverse euphemism for “4 weeks accounting course”, I really question the suggested punishments.
Or just spend some money to get an accountant to do the bookkeeping lah.
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