Crying over liquor assets

Customs is in charge of collecting duties on imported goods. 2 major areas of duties are on alcohol and cigarettes.

Recently, a clever scam involving alcohol bottle exchanges were busted and ten people arrested in relation to fraud involving about $400,000 in import duties and taxes. Normally, alcohol meant for export escapes taxes. This is common as Singapore is a major transhipment centre. Alcohol meant for export has to be stored in a license warehouse.

The scam is supposed to involve a switch of bottles filled with alcohol with those filled with nothing or with water, and then, the latter is packed into cartons for export.The hope is that Customs would think that the exported bottles were those filled with alcohol while the actual valuable bottles were then sold in Singapore. Penalties for tax evasion can be up to 20 times the tax evaded.

Because taxes on alcohol and cigarettes are high in Singapore, there are many cases of tax fraud involving such producst. As regards cigarettes, the scope of the problem has resulted in Singapore law requiring all duty paid cigarettes to bear individual markings. Therefore smuggled cigarettes will not have this marking and court cases against smugglers are much easier to prove. Some may wonder what is to stop smugglers from printing the markings; however, this is not worth the expense. Smugglers normally source for their cigarettes from nearby countries where no such markings are required. To stem the problem, persons caught with smuggled cigarettes are slapped with hefty fines.