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Something weird here - she earned nearly $1m in two years and has no money to pay a $185,000+ fine?

The Straits Times
www.straitstimes.com
Published on Nov 22, 2012
Remisier jailed for tax evasion

By Elena Chong

A remisier was jailed for one week and ordered to pay a total penalty of $185,849 on Thursday for under-reporting her income to the tax authority.

Teo Joo Hiang, 52, will serve another five months and two weeks' jail as she could not pay the penalty which is three times the amount of tax evaded.

This is the first case where a remisier has been charged under the Income Tax Act for tax evasion.

She pleaded guilty to making a false entry in her tax return for the year of assessment 2010 that her brokerage income from Phillip Securities was $258,164 when it was $676,216.

For the year of assessment 2009 she made a false entry that she earned $158,920 when the actual figure was $269,258.

Two other charges were withdrawn and compounded for a sum of $93,380.

She could have been fined up to $10,000 and/or jailed for up to three years per charge plus a penalty of treble the amount of tax undercharged.

Maybe she suffered from trading losses. Many of them punt big, contra here and there but lost big time despite earning commissions from their own trades .

I would rather go to jail too to save the $185,849.
Free food and stay.

(22-11-2012, 06:22 PM)WolfT Wrote: [ -> ]I would rather go to jail too to save the $185,849.
Free food and stay.

That depends on 1) How old you are ie opportunity cost 2) declaration in all your job applications and membership 3) not interesting in public office in any form

Does Phillip Securities provide its remisiers a yearly statement of brokerage income so that they do not have to compute themselves.

If remisier trade using his personal account, shouldn't the P&L considered as capital gain/loss?

Can she resume as remisier after jail?

Will more people start taking the CMFAS exams, especially mid-careers who are stuck in a linear increment job?

$676,216 brokerage fee is equivalent to approx $270 millions transaction volume in a year (with average 0.25% rate). She is either a successful remisier with successful traders as customers, or she is betting heavily herself.

Since she is not able to pay the $185,000, i tent to agree that she loss most if not all of her money in her trades.

(22-11-2012, 07:51 PM)CityFarmer Wrote: [ -> ]$676,216 brokerage fee is equivalent to approx $270 millions transaction volume in a year (with average 0.25% rate). She is either a successful remisier with successful traders as customers, or she is betting heavily herself.

Since she is not able to pay the $185,000, i tent to agree that she loss most if not all of her money in her trades.

$676k in income, assuming she has a 40% share, means commissions earned by Phillip Securities were $1.69m. For large clients the commission rate can be 0.15% or lower. Let's use 0.15%. That means trade value was $1.13bn!!! Assuming 250 trading days per year, that means that on average she cleared $4.5m of trades per day. It points to massive clients, massive contra trades, or some combination of the two.

Many remisiers are trading for themselves.

Is it possible that the brokerage income includes her trading gains in 2010? It is not uncommon for remisiers to trade on their own account.

how does it work exactly? can anyone shed light on the income earning mechanism of a remiser?

does it include commission from own trade?
does it include trading capital gain?