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Businessman jailed 15 months for tax evasion

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A businessman convicted in the District Court of evading profits tax was today (December 11) jailed for 15 months and fined $1.306 million, representing about 50% of the tax evaded.

The defendant, aged 49, was the sole proprietor of a plastic silk screen printing company. For the years of assessment 1994-95 to 1998-99, the defendant instructed his part-time accountant to inflate the purchase in the accounts of his company. The defendant fabricated invoices and delivery orders of the purported suppliers to cover up the inflated purchases for the year of assessment 1997-98.

The profits of the company for the relevant years were understated by $17,640,070 and the tax evaded amounted to $2,616,742. The defendant was convicted of 10 counts of tax evasion. The charges comprised four counts of omitting from his tax returns of the profits of the company, contrary to section 82(1)(a) of IRO; five counts of authorising the preparation or maintenance of false accounts, contrary to section 82(1)(f) of IRO; and one count of making use of or authorising the use of fraud, art or contrivance, to falsely claim payments made to suppliers in the accounts, contrary to section 82(1)(g) of IRO. He was also convicted of one count of cheating the Public Revenue, contrary to Common Law and section 101E of the Criminal Procedure Ordinance.

A spokesman for the Inland Revenue Department (IRD) reminded taxpayers that tax evasion was a criminal offence under the Inland Revenue Ordinance (IRO). Upon conviction, the maximum penalty for each charge is three years' imprisonment and a fine of $50,000 plus a further fine of three times the amount of tax evaded.

Ends/Tuesday, December 11, 2007

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