Customs seized 2418 cartons of cigarettes in July last year which had been imported from China. Photo / Supplied
Customs seized 2418 cartons of cigarettes in July last year which had been imported from China. Photo / Supplied
An Auckland businessman has been sentenced to nearly a year of home detention for his illicit tobacco "plunder" and efforts to avoid more than half a million dollars in tax.
In July last year, Bo Lin imported a shipping container of foodstuffs from China under his business trading name, EnternalTrading Limited.
An inspection by Biosecurity New Zealand revealed the container held cartons of Chinese-branded cigarettes hidden inside boxes of food.
There were 2418 cartons of undeclared cigarettes, which accounted for some 483,600 individual smokes.
Lin and his company, of which he is the sole director and shareholder, were then charged with defrauding the revenue of Customs in an effort to dodge more than $537,500 in excise tax.
Today, after pleading guilty, the 41-year-old and Enternal Trading were sentenced by in the Auckland District Court.
The offending was described by Judge Brook Gibson as a significant importation with the intention of defrauding the Crown, while the profit Lin could have made had he been able to sell the cigarettes would have been significant.
He sentenced Lin, who was aided by a Mandarin interpreter, to nine months of home detention, which Judge Gibson said was sufficient for "denouncing your plunder".
In that case, a businessman and his company avoided $18.73m in tax by smuggling nearly 20 million cigarettes into the country from China between 2015 and 2018.
The businessman, who has interim name suppression while others charged remain before the courts, was sentenced in June to five years and three months' imprisonment, but the company involved was only fined $9800.
Newell argued Eternal Trading, while liable for a fine of up to $100,000, should receive a lesser fine because the total tax avoided was significantly less.
However, Crown prosecutor Daniel Becker told the court some $4m in cash had also been seized during Operation Whitethorn, which he expected the judge had taken into account when fining that company.
Ultimately Judge Gibson ordered Enternal Trading, which he described as Lin's "alter ego", to pay a fine of $25,000.
The cigarettes, he added, would probably be destroyed.
The smuggled cigarettes were hidden inside boxes of food, Customs said. Photo / Supplied
Today's sentencing also comes after the Herald last week revealed New Zealand's largest ever single-seizure tobacco smuggling case.
A Malaysian businessman has been charged with importing 2.39 million cigarettes inside a container from Malaysia on July 27 and trying to avoid a $3m tax bill.
The find also came less than two weeks after Customs announced what was previously its largest single tobacco seizure - 2.2 million cigarettes.
Last month the Herald also revealed New Zealand's increasing tobacco black market saw the Government miss out on $287.4m in tax revenue for 2019.
Some politicians have criticised the effectiveness of the annual tobacco products tax hike, which has led to cigarette prices in New Zealand being among the highest globally and behind only Australia in the Pacific-South East Asia region.
Deputy Prime Minister and New Zealand First leader Winston Peters said last year "the price point has reached such a level that organised crime groups see economic opportunity".
More legislation to help combat the problem came into effect last month in the form of the Customs and Excise (Tobacco) Amendment Bill. It closed a loophole allowing people to import cigarettes and loose leaf tobacco for manufacturing cigarettes and "roll your owns" for black market sales without excise tax.
Only Act voted against it, party leader David Seymour arguing further legislation simply creates more bureaucracy and continues to drive the tobacco supply underground.
Customs Minister Jenny Salesa said she believed the new law gave authorities enough powers to stem the flow of illicit tobacco into New Zealand.
For the first time in four years, no increase to the tobacco tax was also announced as part of the Government's 2020 Budget.
