Kiwifruit labour contractor jailed – article by Sunlive

An agricultural contractor is facing 12 months in prison after he was sentenced in the Tauranga District Court on Tuesday for tax evasion to the tune of $55,000.

Adrian Ace, whose company Pride Contracting Limited provided labour for the kiwifruit industry, had earlier been found guilty of 28 charges of failing to account for PAYE and three charges of evading GST.

The outstanding amount was just under $55,000 and it was for this that he was prosecuted under the Tax Administration Act 1994.

The Inland Revenue Department’s investigations manager, assurance, Jonathan Matthews, says the business was registered for income tax, GST and PAYE in April 2004, however, the company either filed its returns late or had payments dishonoured.

“In August 2005, Inland Revenue entered into a repayment agreement with Mr Ace to try and help him repay his debts, which had reached just over $21,000 at that stage,” says Jonathan.

“The defendant made six repayments of $1800, but stopped making payments in March 2006.

“Our investigation also showed that no PAYE payments were made between July 2006 and December 2007 and the company stopped filing its GST returns after March 2007.”

In an interview in 2009, Ace admitted receiving statements from the IRD, but that he disregarded them.

“Mr Ace admitted that he used the PAYE deducted from his workers to pay for rent and petrol and the GST that was collected was used to pay wages.

“Mr Ace also used his business’ bank account for personal expenditure including rent, groceries and recreational activities,” says Jonathan.

“Mr Ace claimed that he was advised that the 15 per cent withholding tax that was deducted by the orchardists who employed his services covered his tax liabilities.

“This advice was incorrect as it was his responsibility to know what his obligations were and to have met them.

Jonathan says if people are unsure of their correct tax requirements, then they should contact their tax agent or talk to Inland Revenue directly.

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