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Property owner convicted for filing incorrect Tax Returns

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A property owner was prosecuted and convicted for making incorrect tax returns by omitting rental income, contrary to section 80(2)(a) of the Inland Revenue Ordinance. The defendant pleaded guilty to the 2 charges before Magistrate Michael Jenkins of the Western Magistracy today (February 25).

At the material times, the defendant was the sole owner of 3 properties and received rental income totaling $1.8 million odd from the letting of the said properties during the 2 years ended on 31 March of 1997 and 1998. The defendant, however, without reasonable excuse, failed to report the said rental income in the 2 tax returns filed to the Inland Revenue Department for the years of assessment 1996/97 and 1997/98.

In passing sentence, Magistrate Jenkins said that the court always takes a serious view on tax offences. As a property owner, the defendant should duly discharge her obligation to report the rental income in the tax returns while maximizing her return on investment. Having taken into account the guilty plea and that the tax involved had been fully paid, the defendant was sentenced to a total fine of $50,000 odd, which was equivalent to about 25% of the tax undercharged in consequence of the incorrect tax returns filed.

A spokesman for the Inland Revenue Department said that tax evasion is a criminal offence with the maximum sentence of 3 years' imprisonment and a fine of $50,000 on each charge, plus a further fine equivalent to three times the amount of tax undercharged.

End/Monday, February 25, 2002

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