A mother and daughter were sentenced to home detention and community work for tax evasion totalling nearly $2 million.
Faalaa Fialua was charged with 4 representative charges of evading the assessment and/or payment of GST and PAYE for two different companies she ran.
Her mother, Vaipou Vaoga, faced 2 representative charges of evading the assessment and/or payment of GST and PAYE for one of those companies.
They were both sentenced on 28 April at the Waitakere District Court to 12 months home detention and to do 40 to 50 hours community work.
The first company
TK-Kovati Limited was set up in November 2012 with Vaoga and her husband as directors. The company supplied workers to pick crops.
The company was initially managed by Vaoga but in 2020 Fialua took over running it. Vaoga left New Zealand 2 days before the country went into COVID lockdown. She returned from Samoa in December 2022.
In March 2020, Fialua closed the company. Nine days later she set up another company to continue the business previously carried out by TK-Kovati, in an effort to circumvent the company’s tax obligations.
Between 2018 and 2019 Vaoga evaded the assessment and/or payment of $487,000 in GST and approximately $510,000 in PAYE.
During 2020, while in control of TK-Kovati, Fialua deliberately evaded the assessment and/or payment of $130,788 in GST and $378,766 in PAYE.
The second company
Fialua set up VAG Son’s Limited (“VAG”) in December 2020. From the start, it was never tax compliant.
She evaded the assessment and/or payment of $132,248 in GST and $236,141 in PAYE.
In total, over the two companies, Fialua evaded the assessment or payment of a combined GST and PAYE for the two companies of around $878,000, over about a two-year period.
The total evaded by Vaoga was around $997,000.
The sentence
Judge Singh set a starting point for the offending of 45 months and 42 months imprisonment for Vaoga and Fialua respectively.
He found that Fialua’s culpability was slightly less because it was her mother her brought her into the business and there would have been family pressure on Fialua to continue it on.
From that starting point, however, with guilty plea credits and after taking into account all of the personal factors (such as ill health and disproportionate effects on dependent children), Judge Singh decided he could take a “merciful approach” in sentencing Vaoga and Fialua and noted if not for those factors a prison sentence would likely be the end result.
The Judge said while the amount of the evasion is large there is no suggestion they lived a lavish lifestyle as a result of the offending.
He also accepted the defence suggestion that Fialua’s setting up the second company was motivated by being able to continue paying workers.
Judge Singh did not accept Vaoga’s argument that she didn’t understand tax because she had a number of reminders and warnings from Inland Revenue and simply chose not to prioritise fulfilling the company’s tax obligations.