Millionaire tutor paid taxes of $186,000

“Mr Phang Yu Hon, 47, is a tuition millionaire and shows his income tax records readily to prove how much he earns and what he pays in taxes each year. It took just two years for him to double his income from about half a million dollars in 2009 to $1 million in 2011.

All from teaching physics, and mostly to students from top schools such as Raffles Institution, Hwa Chong Institution, and National Junior College – many already doing well, but keen to make sure they continue scoring As.

Mr. Phang runs and is his only tutor. He says the secret to his success lies in running group sessions for 30 or more students at a time and doing it all himself. That, and a reputation that has kept students coming even as his fees rose to between $380 and $720 for four two-hour lessons.

Mr. Phang was candid in describing his income to The Sunday Times, showing his tax records. He recalled the year his income crossed $1 million and he had to pay taxes of $186,000. “My heart ached when I had to pay my tax bills. I can buy a Mercedes-Benz (with that sum),” he said. But he said he was happy to pay more tax because he was earning a lot more.”

We came across this news article from The Straits Times recently. This highlights the importance of income tax planning if you do not want to end up like him, paying a fortune for his income tax. Most importantly, it is not true that you need to pay more taxes just because you are earning more. In this case, the millionaire tutor has paid a whopping 18.6 percent of his declared income to the tax authority.

As many of us know, many millionaires and profitable companies pay very little taxes or any at all. They know how to leverage the tax deductions, reliefs, and structures that are permitted by the tax provisions to minimize their tax liability. Obviously, behind all these schemes are their tax consultants!

So, it is essential to plan ahead if you want to pay minimal tax. Try to engage a tax expert who can advise you on your tax matters. Trust us, the money will be well spent.


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ACRA Cancels Registration of Filing Agent and Qualified Individual for AML/CFT Breaches

The Accounting and Corporate Regulatory Authority (ACRA) had cancelled the registrations of filing agent (RFA) and qualified individual (RQI) on 18 January 2024. The registrations were cancelled in view of breaches of anti-money laundering and countering the financing of terrorism (AML/CFT) controls under the ACRA (Filing Agents and Qualified Individuals) Regulations 2015 (the “ACRA Regulations”).

Some of the basic AMT/CFT controls that a RFA and RQI are required to exercise are as follows:

(a) perform additional customer due diligence measures when a customer is not physically present during onboarding;

(b) inquiring if there exists any beneficial owner in relation to some of its customers; and

(c) perform risk assessments i

RQIs and RFAs provide corporate secretarial services for business entities, such as helping customers to incorporate companies, file annual returns and fulfil other filing requirements under the Companies Act 1967 or other Acts under ACRA’s purview. RQIs and RFAs are required to perform customer due diligence measures in accordance with the ACRA Regulations, and conduct their business in such a manner as to guard against the facilitation of money laundering and the financing of terrorism. RQIs and RFAs must also satisfy statutory requirements such as being fit and proper persons, to be registered or continue to be registered.

RQIs and RFAs who breach their statutory obligations may be subject to enforcement actions, such as financial penalties of up to $10,000 or $25,000 per breach respectively or have their registrations with ACRA suspended or cancelled.

Therefore, RQIs and RFAs play an important role in helping to detect and combat illicit activities.

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