A Bay of Plenty orchard worker has admitted being the kingpin at the centre of a $15 million tax evasion scheme in what Inland Revenue says is a landmark case.
Mohammad Wasim, 39, pleaded guilty to 81 charges of evading an estimated $15,080,861 worth of GST, PAYE and
income tax when he appeared in the Tauranga District Court.
Inland Revenue's acting group assurance general manager, Raju Budhia, said this case was the biggest tax evasion prosecution by his department to date in the horticultural industry. The IRD has confirmed more prosecutions are in the pipeline.
Wasim, already in jail for bigamy, is to have a sentencing date confirmed. The maximum penalty for each charge is five years' imprisonment.
Crown prosecutor Rob Ronayne told the court that between April 1, 2004 and October 31, 2006, Wasim was the kingpin at the centre of a complex tax evasion scheme involving agricultural contractors in the Bay of Plenty.
The scheme involved contractors evading their tax liabilities by claiming they subcontracted work to another company or having another company issue an invoice for work completed by their employees, Mr Ronayne said.
The other company either failed to file returns or filed returns declaring minimal profit, thereby paying little tax.
Inland Revenue estimates that $15,080,861.52 worth of tax was evaded by contractors as a result of invoices issued by Wasim, who was arrested in Napier in late July.
Mr Budhia said since the withholding tax exemption regulations changes were made last year it was harder for non-compliant contractors in the horticulture and viticulture industries to avoid tax obligations. "But further minor amendments to the regulations are being considered," he said.
- Bay of Plenty Times
