The Invisible Hand

By Chong Chee Kin

TAX CHEAT: Looi, who declared only $2,800 in profits over six years, was ordered to pay a $196,000 penalty.

OVER six years, Looi San Cheng made $1.06 million selling his famous Tip Top curry puffs from his Ang Mo Kio hawker stall.

But when it came to giving the taxman his due, Looi lied and declared profits of only $2,800 between 2001 and last year.

Yesterday, Looi became the first hawker to be convicted and jailed for tax evasion.

Looi, who will spend two weeks in jail for two of the six charges under the Income Tax Act, was also ordered to pay a penalty of $196,000 - three times the amount of taxes he dodged in 2005 and last year.

The remaining four charges were withdrawn after Looi paid a further $291,000 penalty to compound them.

Looi could have been jailed up to three years.

The 63-year-old founder of the family-run business made headlines in August last year on a much happier note.

Tip Top was cited by Prime Minister Lee Hsien Loong in his National Day Rally speech as a small local company having made inroads overseas, with outlets in Harbin and Shenyang in China.

Looi had started humbly, selling the snacks at his Marine Parade bakery in 1976. They became so popular that he moved to his present location three years later.

A different picture was painted of Looi yesterday by Inland Revenue Authority of Singapore (Iras) prosecutor Sinnadurai Maniam.

He told the court that Looi had wilfully made false entries in his income tax returns for six years.

Following a tip-off in September last year, Iras raided Looi's Housing Board flat in Serangoon Avenue 2 and his Ang Mo Kio Central stall.

An audit of the accounts revealed the discrepancies.

It turned out that while Looi claimed he sold 4,000 to 5,000 curry puffs a day at $1 each, the figures did not match the statement of accounts for the stall.

He earned nett profits of $138,000 to $236,000 annually in those six years.

But Looi, in his tax returns for those years, declared that, at best, he made only $18,000 in nett, or taxable, profits.

In his 2002 income tax returns, he stated that he made a loss of $37,209 in 2001 when in fact, he made a profit of $145,000.

Urging the court to send a strong message that tax evasion would not be tolerated, Mr Sinnadurai pointed to the substantial amount of taxes which Looi had dodged.

In the six-year period, he under-declared his takings by about $1 million.

In a letter addressed to District Judge Aedit Abdullah, Looi, who was unrepresented, said he was remorseful and had followed the wrong advice from his bookkeeper.

He had been cooperative with the taxman and opened his books to them because he had 'nothing to hide'.

Looi was packed off to jail yesterday, but business hardly stopped at the Ang Mo Kio Avenue 8 stall, with customers coming from as far as Sengkang and Yishun for the tasty pastry's famed curry filling and crust.

Signs of a crackdown on hawker tax-cheats came earlier this year, when The Straits Times had reported that about a dozen food businesses were hauled up by the Iras for under-declaring their incomes.

More of them might be headed for the courts.

To come clean on your tax returns or to give tip-offs on tax cheats e-mail Iras at iid@iras.gov.sg

cheekin@sph.com.sg