The taxman's audit of taxpayers last year unearthed a real estate agent who had under-declared his income by an eye-popping $2.69 million.

The agent, who has not been named, had to pay a penalty of $238,000 imposed by the Inland Revenue Authority of Singapore (Iras).

He was one of 791 real estate agents and food and beverage operators who were audited by Iras, in an exercise that recovered about $5.7 million in taxes and penalties.

Iras selects a few industries each year for its twin-pronged efforts - catching those who under-declare and educating those who need help in areas such as record-keeping. Last year's spotlight on real estate agents and food and beverage operators meant their income declarations and supporting documentation were closely scrutinised.

This intense scrutiny revealed a wide disparity in terms of how much income each of those audited had under-declared, with the amounts ranging from just $200 to $2.7 million. For real estate agents, taxes recovered from a single individual went as high as $476,000; for food and beverage operators, they were as high as $145,000.

Because of the buoyant rental market in 2007, Iras observed a 21.5 per cent rise in the net rental income declared by taxpayers last year.

Last year, 12,000 cases of rental income declarations were reviewed by Iras. Of these, 12 per cent involved wrongful claims, and the amounts declared had to be amended. Another 500 cases are being looked at and, to date, Iras has confirmed that the declarations were made correctly in 226 cases.

On a positive note, Iras observed that taxpayers are generally compliant in their income reporting.

Lorna Tan

This article was first published in The Straits Times.