2007 media releases

Businesses foolish to try to suppress details of income
14 March 2007

Inland Revenue today warned that businesses were foolish to try to cheat on their taxes by lying about their profits.

This follows the successful prosecution of a Wellington restaurant for suppressing its income in an attempt to evade the payment of tax.

Restaurateurs Ying Wai Chiu and Sun Ho Chiu were sentenced in the Wellington District Court today to 250 hours each of community service. Ying Wai Chiu had earlier pleaded guilty to six charges of knowingly providing false income tax returns, and 12 charges of knowingly providing false GST returns. His wife had earlier pleaded guilty to aiding and abetting the offending of her husband. The couple were also convicted of fraudulently obtaining Family Support based on the false income levels.

The couple ran a restaurant, The Ye Jun Restaurant, in Willis Street, Wellington. Inland Revenue investigators discovered that the business didn't have any systems to record cash transactions, and that it was reporting considerably lower profit than is usual in the restaurant trade. The couple attempted to explain that away by saying that competition had opened up nearby.

However investigators found that large cash deposits had been made into the defendants' personal bank accounts.

The total amount of tax that the defendants evaded between 1999 and 2002 was $25,519, and the total amount of GST evaded between 1998 and 2004 was $10,169. The Family Support payments totalled $16,615. The defendants have had to pay about $116,000 in taxes and penalties.

Stuart Lavin, Area Manager Investigations, Inland Revenue, said this was a classic case of tax evasion, with a profitable business suppressing its income to avoid paying tax.

"We owe it to all those honest businesses out there to make sure that people trying to cheat the tax system are brought before the Courts," said Mr Lavin.

"Inland Revenue has the resources and skills to detect taxpayers who are trying to hide their cash receipts," he said. "We use a wide range of sources, and we also have extensive knowledge of the "different profit levels in different types of business."

During the year ended 30 June 2006, Inland Revenue made adjustments of $72.3m with respect to cases involving evasion and had just under 150 of its investigators looking at this area throughout the country.

"Taxes are used to fund schools, hospitals, roads and other resources. People who cheat on their taxes are ripping off the community," said Mr Lavin.

For further information contact:

Alison Welch
027 243 6970

Other media releases this year

• Draft guidelines released for new R&D tax credit
• Man extradited from Australia to face tax charges
• Working for Families Tax Credits to be made early
• Inland Revenue alerts tax professionals
• 'Money man' behind major tax scam jailed
• Third conviction in Rawleigh tax evasion case
• Samoan chief receives two years' home detention
• Early working for families tax credits scheduled
• Cash businesses are in the spotlight
• Inland Revenue transfers first KiwiSaver funds to scheme providers
• Late filers advised to contact Inland Revenue
• Wellington Inland Revenue staff to centralise
• Christchurch businessman fined $20,000 on tax charges
• Hamilton JP jailed for two years for $1.1 million tax evasion
• Businessman pleads guilty to $1.3 million in tax charges
• Jail term extended for Tauranga tax evader
• Inland Revenue offers Language Line
• Inland Revenue wins prestigious IT award
• Inland Revenue simplifies tax with Business Is Booming
• Inland Revenue reassures people affected by weather
• Customers urged to contact Inland Revenue
• Inland Revenue issues GST statement on unconditional property sale agreements
• KiwiSaver information readily available from Inland Revenue
• Scott Anderson bankrupted for unpaid debt of $13 million
• Inland Revenue welcomes 'Trinity' court ruling
• Christchurch tourism operators' concern leads to community service for tax evader
• Inland Revenue welcomes prison sentence for GST fraud
• Levin man sent to jail over $45,000 in GST fraud
• Businessman who "undercut the opposition" jailed for tax fraud
• Accountant's low profits prompted tax audit
• "Not a lot" of effort to pay taxes results in jail term for tax evasion
• Tiler in court for keeping staff tax payments
• Northland flood victims should call if having problems with tax payments
• Tax agent fined $10,000 for refusing to cooperate with Inland Revenue
• Early Working for Families Tax Credits payments
• Nelson man in court for not passing on employees' tax payments
• Tax season underway
• Dairy owner in court for cheating on taxes over seven years
• Two years' prison for 146 tax offences
• Refusing to cooperate with Inland Revenue lands couple in court
• Prison sentence upholds integrity of tax system, says Inland Revenue
• Early family assistance payments
• Tax payments due on 7 February

more media releases ›

Corporate Affairs
Inland Revenue

To make a media query:
Phone 04 890 1698 or email mediaqueries@ird.govt.nz
Please note, the email address is only for enquiries from the news media. It is monitored during normal business hours 8am - 5pm Monday to Friday.

P O Box 2198
Wellington 6140
New Zealand

Date published: 14 Mar 2007

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