Company director jailed after failing to pass $1.6m in tax to IRD

• Melanie Jill Tatana, also known as Melanie Jill Smith, failed to pass on PAYE payments over three years.
• She was sole director of asbestos removal and labour hire company Asia Pacific Group at the time of the offending.
• Tatana was not remorseful and the sentence needed to deter others, judge says.

A company director jailed after she failed to pass more than $1.6 million in workers’ tax payments to Inland Revenue spent her ill-gotten gains on gambling, takeaways, liquor and making large cash withdrawals, the public tax department says.

Melanie Jill Tatana, also known as Melanie Jill Smith, was sentenced on Wednesday to three years in jail over the tax fraud described by Judge Michael Crosbie as the worst to come before the Christchurch District Court in 20 years.

The offending through asbestos removal and labour hire company Asia Pacific Group involved the wilful diversion of funds, rather than business insolvency, IRD said in a media release today.

Between April 2019 and September 2022, APG was required to deduct PAYE (pay-as-you-earn tax) from the wages of its roughly 60 workers and then pay it to IRD.

On 63 occasions during that period, APG failed to pay the full amount which totalled more than $1.6m.

“As a result, Tatana was charged with 63 counts of aiding and abetting APG to knowingly take PAYE from workers’ wages and not pay it on to Inland Revenue,” IRD said.

Analysis of APG’s bank accounts showed more than $800,000 had been diverted for Tatana’s personal use.

Further significant funds had been diverted to Tatana’s personal bank account and Tatana’s daughter’s bank account, which Tatana was also using at the time, IRD said.

“The money went on large cash withdrawals, gambling, takeaways, and liquor … [but] we can’t break that down to how much on each.”

Between April and May 2022, APG also received more than $2.2m in Covid-19 wage subsidies along with $107,500 in government resurgence support payments.

Tatana was the sole director of APG at the time of the PAYE offending, was the signatory on the bank accounts, and dealt with Inland Revenue in relation to PAYE debt, IRD said.

“[She] was given several warnings, but the non-payment continued and in May 2021 she was told APG was under investigation for failure to pay PAYE.”

Melanie Jill Tatana appeared in the Christchurch District Court on Wednesday and was jailed for failing to pass on workers' tax payments to IRD. Photo / File

Judge Crosbie agreed with the IRD that Tatana had shown a lack of remorse and he said the sentence needed to “denounce and deter” such offending.

Government departments could also be seen as easy targets, but if everyone offended as Tatana had “we would be in a state of chaos”, the judge said.

Sign up to The Daily H, a free newsletter curated by our editors and delivered straight to your inbox every weekday.