In a rare case of its kind, a beneficiary who for a while became a fugitive has been awarded a prison term on proven charges of tax evasion and other charges.
The Auckland District Court sent Chandar Prakash on June 18, 2012 to prison for the next one year and ten months because of those charges.
The Indo-Fijian had earlier pleaded guilty to evading a tax amount of $170,000, on a representative charge under the Tax Administration Act of deliberately evading the assessment and payment of tax between 2001 and 2006.
According to Inland Revenue Department (IRD) Acting Group Assurance Manager Graham Tubb, the case relating to Prakash was suspended for two years after the defendant fled overseas.
“He travelled to Fiji in 2009, one month before his scheduled court hearing and did not return until 2011. He was arrested a month after his return. He failed to notify his legal or our Department that he returned enable resumption of the court proceedings,” he said.
Mr Tubb said that the defendant’s absence had increased costs to IRD.
“This is a case of very serious, deliberate and repeat offending. Prakash had deregistered for GST in 1996, while working as a courier driver but did not re-register when he started working as an architectural draftsman in April 2011. He ceased filing Income Tax Returns in 2000 and did not pay GST monies owed to the Department, even though he had collected them in invoices to the clients of his architectural practice,” he said.
According to Mr Tubb, the defendant’s deception became evident when he obtained finance to purchase two Auckland properties in 2006, each valued over $430,000 and a car valued at $80,000 in 2007.
Prakash became bankrupt in 2009, compelling IRD to write-off debts of more than $1 million, including penalties, interest and uncovered student loan.
Mr Tubb said the accused has more than ten years of business experience and was fully aware of his obligations to maintain records and file tax returns.
“Our Department attempted to assist with his tax affairs, yet he continued to be non-compliant and refused to provide documentation with the intention of not paying tax. As a result of his actions, has ended up in court, and this sentence shows that IRD and our courts view such offending seriously,” he said.
He said New Zealand’s tax system was based on voluntary compliance and worked well because a majority of people understood its importance.