TAX EVASION

Evening Star, Issue 25708, 4 February 1946, Page 4

TAX EVASION

OFFENDER HEAVILY FINED DEFICIENCIES SINGE 1941 DISCLOSED " The amount of the deficiency is serious, • and this is not a matter in which the court can impose a nominal penalty,' said the magistrate, Mr H. W. Bundle, in fining William Ernest Matthews, of Carroll street, a jeweller, on four charges of wilfully furnishing false returns of income. On the first charge he was fined £SO and costs (£3 13s), and on each of the ofher charges £25 and costs (£3 13s). The first three charges related to income tax returns for the years ended December 31, 1941, 1942, and 1943. There had been no return made for the year ended December 31, 1944, but a social security tax return for 1945 also showed a false return, and a charge was laid in respect to this. ltepresenting the Commissioner of Taxes, Mr J. B. Deaker said that an investigation had been carried out in September last. He kept a record book showing his daily sales and purchases, but no sufficient set of books by which his position could be checked. Therefore the method adopted by the department was to check a statement of his assets and liabilities in December, 1939, with a similar statement in September, 1944. At the earlier date he had £2,130 in liquid cash assets, and £675 at the time of the inspection.

The defendant had engaged a public accountant to assist the department's inspector, and the two fmally agreed that the amount of income short-returned was-£1,989 15s 9d over the whole period. The defendant claimed that the amount should not have exceeded £1,500, but that was still considerable. The claim for additional income tax due was £391, and for social and national security tax £243, these figures not taking penalties provided into account. The defendant- was emphatic, continued Mr Deaker, that the returns, as regards his shop business, were absolutely correct, but that from the early stages of the war he had worked every night at home on repair work. He claimed that the money he earned in his leisure at the expense of his health was his .own money, did not belong to the business, and should not be TAX-EVASION RIFE. "The department believes," said Mr Deaker, " that similar evasion is rife, and it is taking extensive steps to stamp it out. The Commissioner of Taxes some time ago made a public statement to this effect, stressing that if offenders went to the department' and gave correct returns no prosecution would follow. The defendant did not take this course. Tax-dodging means that an honest section of the community pays a heavy tax, while the dishonest section makes money at their expense. If everyone paid all the tax due, the amount of tax payable could be heavily reduced. From the point of view of the honest taxpayer, tax-dodging must be put down. Taxes have been high in recent years in this country, partly, on account of the war, and during this period tax-dodging has become prevalent. The department, also on account of war, has been short-staffed, but from now on intensive efforts will be made to bring offenders to account." NO PRECONCEIVED SCHEME. . Representing the defendant, Mr J. D. Rolfe submitted that it was a oneman business, in which Matthews had always done his own repair work. After the outbreak of war lie had been pestered by people who wanted repairs done, most of .his clients being servicemen and seafarers. Over a period of four years he had taken watches home every evening. Under the threat of a complete breakdown in health he had given up this work in July of last year, before the department's investigation in September. This onerous work became a burden and obsession to Matthews, and he allowed himself to believe that its rewards were separate and apart from the work he did in his shop. He fell into the error of omitting these figures from lis taxation returns. " I submit that the circumstances do not disclose any preconceived scheme to avoid taxation," said Mr Rolfe. " Secondly, the prosecution is exclusively on account of the returns of work which the defendant did at home, and it is not suggested by the department that his returns from his business and other sources apart from this were not fully shown. It was not suggested that his books and records kept at his business premises were otherwise than in order. Lastly, there was no suggestion of any concealment of assets. In fact, the defendant had his property invested in War; Loan, not in the "form of bearer bonds, but in Government stock." The accused was convicted and fined as above.