Singapore Customs has been conducting a series of raids - dubbed post-clearance audits - on parallel importers suspected of avoiding tax by under-declaring the value of cars they import.

Over the past two weeks, there have been three raids on importers housed at the Automobile Megamart in Kampung Ubi.

The raids follow a widening discrepancy between the declared value of cars sold by parallel importers and equivalent vehicles sold by authorised agents.

The lower the declared cost price of a car, the more competitively priced it can be on the retail market.

A recent report in The Straits Times pointed out that such price differences could total more than $10,000 per car.

Singapore Customs was not available for comment yesterday.

The authority rarely confirms or denies such raids, but traders with shops at the eight-storey Automobile Megamart complex said enforcement officers from the agency descended on the premises three times in the last two weeks.

Two raids took place yesterday and on Tuesday.

Boxes of documents and even computers of as many as half a dozen companies were carted away.

Mr Neo Nam Heng, president of the parallel importers' Automotive Importers and Exporters Association, sighed when asked about the raids, which he said had been taking place with rising frequency.

"All importers have to be aware of the consequences of the law," he said. "But unfortunately, not everyone is."

He noted that getting a car cleared by Customs has been 'fast and easy' in recent years.

"But getting a car cleared does not mean there's no problem. If you under-declare, there are going to be problems."

The Straits Times understands that under-declaration is fairly common, and the practice is affecting the profitability of businesses that declare correct values.

Mr Ricardo Soh, proprietor of parallel importer Ricardo Cars, said: "It's a bit of a disadvantage for us. If the Government can review the valuation method and have uniform values across the board, it will be good."

Singapore Customs had a dialogue with parallel importers last week to see if under-declaration could be overcome.

Mr Neo said traders made some suggestions, including imposing after-sales taxes instead of the current practice of taxing before sales.

"They (Customs) said if there are changes, they can't be made immediately. Laws will have to be changed."