Runaway tax cheat cost IRD $1m

Last updated 14:28 18/06/2012

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An Auckland beneficiary who skipped the country while facing tax evasion charges and cost Inland Revenue over $1 million has been jailed for just under two years.

Chandar Prakash was sentenced in the Auckland District Court today after earlier admitting deliberately evading the assessment and payment of tax between 2001 and 2006 totalling $170,000.  

Prakash's case was suspended for two years after he travelled back to Fiji in 2009, one month before he was due to appear in court, and didn't return until 2011.

He was arrested a month later for failing to notify his lawyer or Inland Revenue that he had returned.

Today he was sentenced to one year and 10 months jail.

Acting group manager assurance Graham Tubb said Prakash's absence led to increased costs to Inland Revenue.

"This is a case of very serious, deliberate and repeat offending," he said.

"Prakash deregistered for GST in 1996 while working as a courier driver but did not re-register when he started working as an architectural draftsman in April 2001. He ceased filing Income Tax returns in 2000 and did not return any GST owed to Inland Revenue even though he charged GST when invoicing clients of his architectural practice."

Tubb said Prakash's deception became obvious when he obtained finance to purchase two Auckland properties in 2006, each worth over $430,000, and a car worth $80,000 in 2007.

Prakash was declared bankrupt in 2009.

The total debt written off by Inland Revenue, including penalties and interest and unrecovered Student Loans debt, was just over $1 million.

"New Zealand's tax system is based on voluntary compliance and it works well because the majority of people understand the importance of doing the right thing.

"Prakash has over ten years of business experience and is fully aware of his tax filing and record keeping obligations. Inland Revenue has attempted to assist with his tax affairs, yet he continued to be non-compliant and refused to provide documentation with the intention of not paying tax.

"As a result of his actions, Prakash has ended up in court, and this sentence shows that Inland Revenue and the courts view his offending seriously," Tubb said.

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- © Fairfax NZ News

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