Pay it Back! With Interest! And Penalties! And Fines! Plus go to Jail!
Labour's Northcote electorate committee have been accused of rorting their tax liabilities, by their own Treasurer.
While not explicitly outlined in the article, my pick is that the committee has been declaring income from fundraising activities as 'donations', to avoid paying a nineth of the amounts raised. But here's the rub - for these fundraising activities, the commitee would have been claiming the GST portion of the expenses they paid and getting a refund from IRD.
Because of this mistreatment, the IRD should be able to determine the amount that of GST that the Northcote Committee own and then add penalty interest on the amount owing, which will be calculated at the - according to the IRD website, the current rate 14.24%.
Plus, there are criminal penalties - the IRD Website says "Criminal offences relating to evasion include knowingly intending to evade tax by ... not making a legally required deduction or withholding of tax."
And:
"The penalty for evasion offences is imprisonment for up to five years and/or a fine of up to $50,000."
But given the current environment, in which any civil servant who is not friendly to Labour gets the boot, what's the chances of an investigation and prosecution?
While not explicitly outlined in the article, my pick is that the committee has been declaring income from fundraising activities as 'donations', to avoid paying a nineth of the amounts raised. But here's the rub - for these fundraising activities, the commitee would have been claiming the GST portion of the expenses they paid and getting a refund from IRD.
Because of this mistreatment, the IRD should be able to determine the amount that of GST that the Northcote Committee own and then add penalty interest on the amount owing, which will be calculated at the - according to the IRD website, the current rate 14.24%.
Plus, there are criminal penalties - the IRD Website says "Criminal offences relating to evasion include knowingly intending to evade tax by ... not making a legally required deduction or withholding of tax."
And:
"The penalty for evasion offences is imprisonment for up to five years and/or a fine of up to $50,000."
But given the current environment, in which any civil servant who is not friendly to Labour gets the boot, what's the chances of an investigation and prosecution?
posted by Michael at
6:45 PM
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