|November 27th, 2007||
Inland Revenue is welcoming the jail term of five years and nine months handed down to Mohammed Wasim for his part in a horticultural industry tax fraud involving more than $15 million.
The Wainuiomata orchard worker was sentenced in the Tauranga District Court by Judge Moore today on 81 counts of tax evasion, in the biggest horticultural industry tax fraud ever prosecuted by Inland Revenue. He is required to serve a minimum non-parole period of three years.
The total tax amount evaded was $15,080,861.
The department began investigating the tax evasion scheme operating in the agricultural contracting industry in 2001. It involved contractors evading GST, PAYE and income tax by claiming work completed for growers by the contractor’s employees had been sub-contracted to other companies.
The court heard Wasim recruited young Pakistani and Bangladeshi men to incorporate companies and register them for tax. Contractors contacted Wasim, known as a ‘money man’, to obtain a tax invoice from one of these companies. These invoices were for work the contractors had completed for growers, and for which they had already been paid.
The contractor paid the invoice, and Wasim repaid the money to the contractor, less a fee for himself.
At least 36 companies are believed to have been used in the scheme. Wasim is the first person to be sentenced in relation to this scheme, but other prosecutions are pending.
Inland Revenue Assurance Manager Raju Budhia said the prison sentence was a very good outcome for the horticultural industry as a whole.”Most contractors run honest businesses, and find it difficult to compete with those who are evading tax.”
”The courts are taking tax evasion seriously,” he said. ”Since January 2005, another twelve Bay of Plenty agricultural contractors have been successfully prosecuted for evading tax totalling more than $4.4 million. Ten of the contractors were jailed, for an average of 21 months.”
Mr Budhia said that Inland Revenue has the skills and resources to detect taxpayers trying to evade their taxes. “We use a wide range of sources and have extensive knowledge of profit levels in various industries.”
Source: Inland Revenue Media Release