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PRESS RELEASE (Source : Government Information Centre)

Company director jailed and fined for tax evasion

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A company director was sentenced to five months' imprisonment and fined a total of $1,520,000, equivalent to approximately 100% of the total tax evaded at the Wan Chai District Court today (May 28).

The defendant, CHENG Kwok-hing, aged 44, was the director and shareholder of Winbusy Limited. He pleaded guilty to four counts of tax evasion charges on May 19.

An investigation by the Inland Revenue Department (IRD) into the tax affairs of Winbusy Limited revealed that the company had omitted to report sales proceeds received from two hotels totaling $9.69M in the profits tax returns for the tax years 1992/93 to 1997/98, contrary to section 82(1)(a) of the Inland Revenue Ordinance. The tax undercharged amounted to $1,500,724.

The Court heard that the sales proceeds from the two said hotels were deposited into a bank account maintained in the name of a partnership formerly operated by the defendant's father and his friends. The said partnership ceased business in 1983.

A spokesman for the IRD said that tax evasion is a criminal offence under the Inland Revenue Ordinance. The maximum penalty is three years' imprisonment and a fine of $50,000 on each charge, plus a further fine equivalent to three times of the tax evaded. Tax evaders may also face prosecution of cheating Public Revenue under Common Law and is punishable by the Criminal Procedure Ordinance, which carries a maximum penalty of seven years' imprisonment plus a fine of no limit.

End/Wednesday, May 28, 2003

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