Baker jailed for 'persistent' tax evasion

The baker failed to declare some $6,5 million in cash sales. Photo / 123RF

A Waikato baker has been jailed for what Inland Revenue (IRD) described as "persistent and premeditated" tax evasion.

The multi-million-dollar tax evasion happened over the course of six years.

The baker has been jailed for less than five years.

A Hamilton jury found Mara Sorm guilty on 52 charges of tax evasion relating to himself, his wife, and their company.

The baker failed to declare some $6.5 million in cash sales.

He was sentenced today in the Tauranga District court to 4 years and 9 months in prison.

He's also been ordered to pay $500,000 in reparations.

The tax evasion related to three bakeries in Matamata, Tirau and Thames.

"Our investigation revealed each bakery on average received approximately $347,000 in unreported cash each year. Instead of including the income on tax returns, the money was used to buy rental properties, repay a loan, fund household living and overseas travel," IRD spokeswoman Karen Whitiskie said.

"The offending was premeditated and persistent. Sorm kept notebooks recording cash income which he could have used to file accurate tax returns. He chose not to," she added.

"Sorm also failed to account for income received from rental property in Australia in his personal tax returns and gave further false information when questioned by Inland Revenue about suppressed income.

"When confronted by investigators Sorm made multiple attempts to avoid further inquiries by acknowledging that his returns had accidentally understated cash income and offering to repay the tax.

"In December 2013, search warrants were executed on the defendant's business and residential addresses. In contrast to what Mr Sorm had admitted to investigators, notebooks were found at the business premises which showed the bakeries' true daily sales.

"In this case the amount of suppressed income was more than $6.5m and resulted in Sorm evading at least $2.8 million dollars of GST and Income Tax".

Whitiskie says it is "another example of someone delving into the hidden economy to try to get an advantage over other honest, hard-working New Zealanders".