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Press Release
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Suspended jail sentence for businessman over
tax evasion
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A businessman was convicted today (July 7) at the District Court
on charges of evading profits tax. He was sentenced to four months'
imprisonment, suspended for 12 months and fined $700,000, representing
147% of the tax evaded.
Chan Tse-lap, 76, pleaded guilty
to two charges of wilfully, with intent, assisting his wife to evade
profits tax by making use of, or authorising the use of fraud, art
or contrivance, by inflating the amounts of purchases for the two
years of assessment 1994/95 and 1995/96, contrary to section 82(1)(g)
of the Inland Revenue Ordinance (IRO). He also pleaded guilty to
three charges of wilfully, with intent, evading profits tax by signing
tax returns for the years of assessment 1996/97 to 1998/99, in which
purchase amounts were inflated, without reasonable grounds for believing
the same to be true, contrary to section 82(1)(d) of the IRO.
The court heard that in 1975 Chan
began a business called Cheung Hing Paper Products Factory. It was
initially registered in the name of his wife, Ho Yee-nee. On November
8, 1996, Chan was admitted as a partner of the business. On November
18, 1996, his wife left the partnership and Chan operated the business
as a sole proprietorship thereafter.
An investigation by the Inland Revenue
Department revealed that Chan had inflated the amounts of purchases
for the business. The payments allegedly made to suppliers for settling
the inflated purchases were actually deposited into the bank accounts
of Chan or his wife, or used to settle Chan¡¦s credit card debts.
For the five years of assessment 1994/95 to 1998/99, the total amounts
of purchases inflated were $2,936,428 and the resultant total tax
evaded was $473,421.
A department spokesman reminded people
that tax evasion was a criminal offence under the IRO. Upon conviction,
the maximum sentence for each charge is three years' imprisonment
and a fine of $50,000, plus a further fine of three times the amount
of tax evaded.
Ends/Friday, July 7, 2006
Issued at HKT 18:36
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