2006 media releases
Prison for Tauranga contractor on tax fraud charges
1 June 2006
A Tauranga man involved in the agricultural contracting industry was today sentenced by the Tauranga District Court to three years and three months in prison for his part in the biggest tax fraud in the agricultural industry to be prosecuted to date.
Sandeep Sood pleaded guilty to evading tax of more than $1.5 million. The starting point for sentencing was four and a half years, reduced by 15 months for an early plea.
In November 2003, Mr Sood set up a company, Azaz Contracting Company Limited, with himself as the sole director and shareholder. He then entered into the tax evasion scheme, which involved him issuing false invoices in the name of his company to kiwifruit contractors.
Mr Sood operated in the Tauranga and Hawke's Bay areas between November 2003 and December 2005.
Inland Revenue Service Centre Manager Kevin Moody said the prison sentence was a good outcome for the agricultural industry as a whole.
"Most contractors run honest businesses, and find it difficult to compete with those who are evading tax. We've had a lot of positive feedback from industry representatives who appreciate our efforts to help them 'clean up' the industry.
"Some people seem to have the impression that tax evasion is a 'victimless crime', but that's not the case at all. Taxes help pay for important services like schools and hospitals, so someone evading tax is really stealing from our community.
"The courts are taking tax evasion seriously. Since January 2005, six agricultural contractors have been prosecuted for evading tax totaling more than $1.3 million. Five of the contractors were jailed, for an average of 20 months."
The Government recently changed the withholding tax regulations in an effort to reduce tax evasion in the fruit and wine growing industries. If a contractor is hired for certain horticultural or viticultural tasks, the employer must deduct withholding tax from payments to the contractor - even if the contractor is trading as a company.
"A contractor with a good record of filing returns and paying tax is not disadvantaged," said Mr Moody. "They can apply for a certificate of exemption or a special tax code certificate that will exempt them from withholding tax deductions, or entitle them to a reduced rate."
Other media releases this year
- It's IR 3 time - for many of us
- Owner of chain of rest homes get 21-month prison term for million dollar tax evasion
- Family assistance payments to be made early
- Inland Revenue welcomes tough sentence on tax fraudster
- False identity charges lead to jail term for Christchurch woman
- PAYE evasion leads to jail term
- Family assistance payments to be made early
- Inland Revenue welcomes Govt3 award wins
- PAYE Subsidy available for employers
- One month left to seek penalty cancellations
- Christchurch painter jailed on tax charges
- Inland Revenue can offer help to weather-affected businesses
- Inland Revenue confirms stand on depreciation
- Family Assistance payments to be made early
- Tax discount for new businesses
- Tauranga contractor jailed for tax offences
- Inland Revenue revises rules on shortfall penalty application
- Inland Revenue Flood Support
- Family Assistance to be paid early
- Inland Revenue website wins People's Choice award
- Tax due date coming up on 7 February
- Family assistance payments to be made early
Corporate Affairs
Inland Revenue
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New Zealand
Date published: 01 Jun 2006
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