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Company director gets two years' jail for tax
evasion
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A company director convicted in the
District Court of evading profits tax was today (July 3) jailed
for two years, the longest jail term imposed in a tax evasion case.
The sentence prompted a warning from
Acting Commissioner of Inland Revenue, Mr Tam Kuen Chong, who said
tax evasion was a criminal offence under the Inland Revenue Ordinance
and the Inland Revenue Department would carry out prompt investigation
and institute prosecution action as appropriate.
Upon conviction, the maximum penalty
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.
The defendant, Yeung Kwong-kei, 46,
pleaded guilty to eight counts of wilfully and intentionally assisting
another person to evade profits tax. The charges comprised four
counts of omitting proceeds of sales from the profits tax returns
of a company for the years of assessment 1997-98 to 2000-2001, contrary
to section 82(1)(a) of the ordinance and four counts of making use
of fraud, art or contrivance, to falsely state in the accounts of
the company payments made to suppliers and sub-contractors for the
years of assessment 1997-98 to 2000-2001, thereby reducing its assessable
profits for the relevant years, contrary to section 82(1)(g) of
the ordinance.
The defendant was the shareholder
and director of Hang Hing Computer Label Limited which engaged in
the manufacturing and trading of woven labels. An investigation
by the department revealed that the company issued two types of
sales invoices. One type was computer-generated and issued in the
company¡¦s name and the second was handwritten and issued in name
of a sole-proprietary business formerly operated by the defendant.
The sole-proprietary business had ceased operation early in 1994.
For the relevant years the company
omitted from its profits tax returns proceeds of sales in respect
of all those handwritten invoices. The total amount of sales omitted
was $3,171,040.
The court was told that the defendant
also used false invoices to claim purchases and other expenses in
the company¡¦s accounts, thereby reducing its assessable profits.
The total amount of expenses falsely claimed for the relevant years
was $2,782,580.
The total amount of profits understated
was $5,953,620 and the resultant total tax evaded was $961,978 for
the relevant years of assessment.
Ends/Tuesday, July 3, 2007
Issued at HKT 18:05
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