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Computer systems analyst gets suspended jail
sentence for tax evasion
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A spokesman for the Inland Revenue
Department (IRD) today (August 2) warned taxpayers that tax evasion
was a criminal offence under the Inland Revenue Ordinance.
The department adopts a zero tolerance
policy against tax evasion and will carry out prompt investigation
and institute prosecution action as appropriate.
Upon conviction, the maximum sentence
for each charge is three years' imprisonment and a fine of $50,000,
plus a further fine equivalent to three times the amount of tax
evaded.
The spokesman gave this warning following
a court case under which the defendant, Raymond Chan Wah-fai, 37,
a computer systems analyst, was sentenced to seven months' imprisonment,
suspended for three years, for evasion of profits tax in the District
Court today.
The defendant was earlier convicted
of evading profits tax and failing to inform the Commissioner of
Inland Revenue (CIR) in writing of his chargeability to profits
tax.
The defendant was also fined $540,000,
representing about 200% of the tax evaded in respect of the evasion
of profits tax, and $16,000 in respect of the failure to inform
in writing of his chargeability to profits tax.
The spokesman also reminded taxpayers
that every person chargeable to tax for any year of assessment must
inform CIR in writing of his chargeability not later than four months
after the end of the basis period for that year of assessment unless
he had already been required to furnish a tax return for that year
of assessment.
"A person who fails to
notify chargeability without reasonable excuse shall be guilty of
an offence and is liable for each charge to a maximum fine of $10,000
and a further fine of three times the amount of tax undercharged,"
the spokesman said.
The defendant set up a partnership
business called Metroware Company in 1992. It was managed and operated
by him. However, he omitted most of his service income totaling
$1,858,262 from the Profits Tax Returns of Metroware Company for
the years of assessment 1995-96 to 1998-99. The total amount of
tax evaded was $271,332.
The defendant also stated in the
Profits Tax Return of Metroware Company for the year of assessment
1998-99 that it ceased business on February 9, 1999.
An investigation by IRD revealed
that the business continued to receive service income as usual in
the years of assessment 1999-2000 and 2000-01, but the commissioner
was not informed in writing of the company's chargeability to profits
tax. The total amount of assessable profits was $351,854 and the
resultant tax undercharged was $52,777.
Ends/Thursday, August 2, 2007
Issued at HKT 18:48
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