INCOME TAX EVASION

Chronicle (Levin), 7 April 1949, Page 4

INCOME TAX EVASION

Recent Amendments To Act ~ Explained WELLINGTON, April 7. "The Land and Income Tax Act, 1923, provides for a fine on sum1 mary -prosecution of up to .£100 in . respect of various offences, and in ^ddition there* is power for the commissioner to impose penal tax up to three times the amount of the tax evaded by means of false re- ' turns or the non-furnishing of returns." This statement was made, today by 'the Commissioner 'of . Taxes, Mr. F. G. Oborn, in the course of an pxplanation of vari•us provisions appearing in thc Finance Act (No. 2), 1948, which was passed during last Parlia.mentary session. "One of these provisions relates • to publication in the Gazette of narnes of persons who have been jonvicted of furnishing false reurns of income, or who have been charged with penal tax in respect of such offences," continued the .oatement. Prior to the passing of the Finance Act (No. 2), 1948, the commisuoner was required to publish the names of all offenaers m tne Gazette, but he is now given authority to omit from thao list m the orctzeitc tne .names of tnose tax.■ayers who have voluntarily disclosed the fact that returns as furiiisned by them were false. Such disclosure must be entirely volunuary in the sense that it must be made before any enquiry or investiOation nas been commenced by the ^epartment. It is the practice when charging a penalty by ^yay of penal tax to take a much more lenient view vvhen the taxpayer voluntarily disuoses tne fact that his returns of income are false. in such cases of voiuntary' disclosure criminal charges in the Magistrate's Court will not be instituied, and there will be no publication in the , Gazette of the names of such persons. It is, therefore, in the interests of any person who has made false returns to make a full disclosure to the commissioner, or to any branch superintendenc. Publicity and court » fines will be avoided, and any penalty imposed will normally be of a moderate- amount, approximately equal to interest for the period over vnich ,the ofience has continued. The income, Tax Department has now estabiished branch offices throughout New Zealand and is inereasing the number of travelling xnvestigating accountants, whose principal duty it is to detect offending. taxpayers who have either made faise returns or who have failed to render returns to the department. With the resulting wider coverage ofi New Zealand, the way of ihe transgressor is made still more ditficiilt. If he elects to take a chance and is discovered by the department, then he can blame only nimself for any resulting court proceedings and fines, and subsequent ueavy penal tax. Retention Of Records. Attention is drawn to a new section requiring any person or com- ' pany carrying on business to keep proper recoras and to retain such records for a period of at least seven years, and it *is pointed out that any failure to comply with this requirement constitutes an offence* punishable by the appropriate pSnalties as prescribed in the Land and Income Tax Act,- 1923. This seCtion states that every person carrying on business shall keep sufncient records in the English ianguage to enable. his assessable xncome and allowable deductions - to be readily ascertained by the commissioner, or any officer authorised by him in that behalf, and shall retain all such records so keptafter the passing of the. Act, and all records relating to that business in existen.ce at the passing of this Act, for a period of at least seven years after the completion of the transaction, acts or operations to which they relate. For the purpose of the' section the term "records" includes books of aceount recording receipts or payments, or income or» expenditure, and also includes vouchers, invoices, receipts and such other documents as are necessary to verify the entries in any such books of account. Every person who fails to comply with this - section commits an offence against the principal Act. Social Security Instalments. The social security charge on income other than salary or wages, which was previously payable in four quarterly instalments, is now payable in two equal instalments on July 1 and November 1 each year. This first applies to income other than salary or wages by persons other than companies during the year ended March 31, 1949, the charge thereon being payable by t equal instalments on July 1, 1949, and November 1, 1949. Companies will continue to pay, as in the past, in one instalment on the due date as advertised each year. — P.B.A.