Retailers’ stiff penalty for cheating IRD

onlinefraud, crime, criminal, cyber attack, e-commerceFormer New Plymouth retailer Jianbin Wang has been jailed for three years and nine months for failing to declare millions in cash takings, while his wife Fenglan Liu received two years and three months in prison.

The couple operated three low-cost Best 4 Less retail stores in New Plymouth, Waitara and Wanganui, but failed to pay income tax or GST on a large part of their takings between September 2007 and September 2012.

Inland Revenue Investigations and Advice group manager, Tony Morris, said Wang and Liu’s offending was a blatant case of people who foolishly think that they can get away with not paying their fair share of tax.

“This is tax evasion at the most extreme end of the spectrum,” Morris said. “Our investigators have calculated that cash sales in excess of $2.5 million weren’t declared over the five years of offending. This meant the businesses evaded paying more than $1 million in tax.

“It also enabled the couple to repay a $380,000 mortgage in just two years, all while they were claiming Working for Families Tax Credits because of their supposed modest personal income,” Morris said.

Because the couple failed to declare the business’s full earnings, Wang’s personal income tax liability was also significantly under-reported. He evaded paying more than $1.1 million in GST and income tax, and received more than $50,000 in Working for Families Tax Credits.

After Inland Revenue commenced prosecution action against them, Wang and Liu sold their New Plymouth home and Wang sold his three businesses, forwarding much of the proceeds to bank accounts in China. They also withdrew large sums of cash from ATMs and banks throughout the North Island.

“This sort of despicable behaviour really undermines the tax system,” Morris said. “While the vast majority of taxpayers are doing the right thing, there are people like Wang and Liu who think they can get away with ripping off decent New Zealanders.

“The taxes this couple didn’t pay to Inland Revenue would have gone towards vital Government services such as hospitals, schools and welfare,” he said.

Wang had earlier pleaded guilty in New Plymouth District Court to 42 charges of personal tax fraud and 16 charges relating to company taxes for Top International Trading Limited, but had disputed the amount of the fraud. Liu was found guilty on 16 tax evasion charges but not convicted in relation to the later alleged tax offences.


You have 7 articles remaining. Unlock 15 free articles a month, it’s free.