Cooked up accounts trouble restaurateur

An Auckland restaurateur whose company evaded more than $1 million of tax has been jailed for three years.

Khalid Mehmood was sentenced at Manukau District Court recently after pleading guilty to 144 charges of filing false PAYE, GST and income tax returns for Areeb Khan Foods Limited between 2005 and 2010.

Diaries divulge

Inland Revenue Department (IRD) Investigations and Advice Manager Tony Morris said that it was eight diaries seized in 2011, which were his undoing.

The diaries revealed that between April 2005 and September 2010, Mehmood’s Salateen Indian Cuisine restaurant in Papatoetoe, and the Kebabs Salateen restaurants in Manukau, and Ward Street in Hamilton, made $2.7 million more in sales than what Mehmood declared. He also failed to disclose cash wages paid to staff.

“Mehmood registered all three restaurants for income tax, GST and PAYE. He was fully aware of the rules and knew his actions were illegal,” Mr Morris said.

Partial payment

The tax returns Mehmood filed were based only on the deposits made to the company bank accounts and staff wages paid by cheque.

They failed to show that significant amounts of the restaurants takings were being used to pay cash wages or by Mehmood for his own private use.

Mehmood failed to declare more than $200,000 of income tax, almost $600,000 in PAYE and more than $300,000 of GST.

False benefits

“Mehmood systematically set out to make gains for himself and his employees to the detriment of other taxpayers. Not content to stop with tax, Mehmood was instrumental in enabling his staff to take advantage of social policy benefits including Working for Family tax credits, income tested benefits and low income housing benefits, to which they were not entitled, Mr Morris said.

“IRD brought charges against Mehmood in 2012, but he made every effort to waste taxpayers’ money by delaying prosecution proceedings for almost two years whilst continuing to run his businesses. By putting his assets into other names, he also deliberately hindered IRD from recovering the tax he owes.

“Mehmood intentionally tried to beat the system by signing declarations stating the content of his tax returns were true. He was caught and we are taking action to recover the money owed,” he added.

“In trying to steal taxpayer money from IRD, Mehmood attempted to cheat New Zealanders who abide by the rules. The money he sought to claim is that used to pay for essential services like schools, police and hospitals.”

Free Workshops

If you are in business, you may like to attend one of our free tax seminars or workshops held in various parts of the country. Please visit our website for details (www.ird.govt.nz).

Abdul Rafik is Inland Revenue’s Community Compliance Officer based in Auckland. He will answer your queries, which may be emailed to venkat@indiannewslink.co.nz


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