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Sisters jailed for false claims for dependent parent allowances

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Two sisters were today (June 5) sentenced to two months' immediate imprisonment, after earlier being convicted at the Eastern Magistrates' Courts of evading salaries tax and remanded in custody.

At the end of May, another taxpayer was convicted and jailed for six weeks for a similar offence.

The defendants, aged 35 and 49, each pleaded guilty to five charges of wilfully and intentionally evading tax by making false statements in connection with claims for Dependent Parent Allowances (DPA) and the additional amount to Dependent Parent Allowances (ADPA) for the years of assessment 1998-99 to 2004-05, contrary to section 82(1)(c) of the Inland Revenue Ordinance (IRO).

The Court heard that the first defendant made false statements in her tax returns for the years of assessment 1998-99 to 2002-03. She falsely declared that her mother or father was individually residing with her continuously throughout the years in question. She further claimed that she had contributed money towards the maintenance of her mother for the year of assessment 2001-02.

The second defendant made false statements in her tax returns for the years of assessment 2000-01 to 2004-05. She falsely declared that her father or mother was individually residing with her continuously throughout the years in question.

In accordance with the statements made in the returns, allowances were granted to the defendants in respect of their parents.

An investigation by the Inland Revenue Department revealed that the defendants' parents migrated to the USA in the 1990s and had not visited Hong Kong during the years of assessment 1998-99 to 2004-05. The investigation further revealed that the defendants' mother passed away in May 2000 in the USA.

The first defendant made false claims for DPA and ADPA totalling $300,000 for the five years of assessment 1998-99 to 2002-03 and the total tax evaded was $46,494. The second defendant made false claims of DPA and ADPA totalling $300,000 for the five years of assessment 2000-01 to 2004-05 and the total tax evaded was $48,900.

One of the requisite criteria for claiming DPA under the IRO was that the parent must ordinarily reside in Hong Kong in the year of assessment concerned. The additional requirement for claiming the ADPA was that the parent must be residing with the claimant continuously throughout the year of assessment without paying for the full costs involved.

A spokesman for the department reminded taxpayers to file correct tax returns. Tax evasion is a criminal offence. Making an incorrect statement in the return in connection with a claim for any allowance is an offence under the Inland Revenue Ordinance. The maximum penalty for each convicted offence is three years' imprisonment and a fine of $50,000, plus a further fine equivalent to three times the amount of tax evaded.

Ends/Friday, June 5, 2009

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