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Company director fails to overturn tax evasion verdict

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A company director failed to overturn the guilty verdict in the Court of Appeal today (January 29). The appellant was convicted in February last year of 5 charges of wilfully with intent assisting other person to evade tax viz., 2 counts by omitting proceeds of sales from the profits tax returns of a company and 3 counts by making use of fraud, art or contrivance. He was sentenced to 9 months' jail term and ordered to pay a fine of $2,152,048.

During the years of assessment 1994/95 to 1996/97, the appellant was a director as well as a shareholder of a company. Investigation by the Inland Revenue Department (IRD) officers into the tax affairs of the company revealed that it had issued two types of cash sales invoices, one type with serial numbers bearing alphabetic prefix and another type with serial numbers bearing no alphabetic prefix. For the relevant years of assessment, the company omitted from the profits tax returns, which were submitted to the IRD, the proceeds from the sales in respect of all those cash sales invoices with serial numbers bearing no alphabetic prefix. The amount of omitted sales involved was about $6.25 million and the total profits tax undercharged was over $1 million.

It was revealed that the company had kept two separate sets of accounting records and the proceeds from these omitted sales were deposited into a personal bank account which was opened in the names of the appellant and the company's book-keeper. The money was then shared between the appellant and another director, who was also a shareholder, of the company.

An IRD spokesman said that tax evasion and assisting other person to evade tax are serious criminal offences with the maximum sentence of 3 years' imprisonment and a fine of $50,000 on each charge, plus a further fine equivalent to 3 times the amount of tax undercharged.

End/Tuesday, January 29, 2002

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