Fraud case spurs law-change rush

Press, 12 October 1988, Page 1

Fraud case spurs law-change rush

By

GLEN PERKINSON

in Wellington

A law allowing Inland Revenue Department staff to give evidence against tax defrauders was rushed through Parliament last evening before the start of a big GST fraud case. The law, an amendment to the Inland Revenue Act, allows departmental evidence to be admissible today against defendants seeking charges against them for GST fraud, totalling several million dollars to be dropped. The defendants claim there is no evidence to support the Crown’s case because the evidence was given to the police illegally by the Commissioner of Inland Revenue, Mr John Simcock. The Minister of Revenue, Mr de Cleene, urged the Opposition to support his amendment so that “frauds and cheats against the

people of New Zealand” were prosecuted. He was concerned today’s case would fail if the bill were defeated. Before the amendment was passed, I.R.D. staff were sworn to secrecy about tax offences before the courts. It was illegal for the department to pass evidence to the notice. Mr de Cleene also told the House that he wanted to see tax defrauders jailed. This is not a penalty for offences against the act at present.

Mr de Cleene said the maximum fine of $25,000 was no concern to people who had got away with millions of dollars in tax fraud.

The Opposition was concerned that the amendment would apply retrospectively. Mr de Cleene claimed this was not so. Nevertheless, to Opposition thinking the Judiciary would label the bill “a

constitutional outrage.”

The Opposition spokeswoman on finance, Miss Ruth Richardson, said the charges against the five appearing in an Auckland court today were laid some time ago. This meant the bill was “de facto” retrospective. A copy of the bill had been sent to the Solicitor-General’s agent in Auckland ready to be used in this morning’s case. The Opposition tried to get a sunset clause added to the bill so that it would pass out of law in a year. It was defeated on a division. The Opposition called the bill’s passage a “panic” from the Government because it realised there were loopholes in its GST laws. Mr de Cleene promised the Opposition that he would resubmit the bill to Parliament later so that it could go through the normal channels.