Editorial Two –
We have reported a number of cases in recent weeks in which those evading tax being punished by our law courts. The following is an editorial which was written by Abdul Rafik, Community Compliance Officer at Inland Revenue Department in our October 15, 2013 issue, is timely for a repetition. His warning should be a reminder to all those who deliberately evade tax.
“If you earn a salary or a wage, your employer will deduct the tax every payday. If you work for yourself, you must file an annual income tax return with Inland Revenue Department (IRD) and pay tax on your net profit. But what about the work you do in addition to your day job? Are you keeping a record of it for IRD? The tax laws require you to pay tax on all your income; even income you earn from one-off cash jobs or from work you do outside business hours.
“Why pay tax?
“The Government uses our taxes to pay for important services like schools, hospitals, roads, and policing – services that benefit the whole community. If someone pays less tax than they should, everyone misses out.”
The defaulters
“Businesses evading tax are causing unfair competition, because they can undercut businesses that are playing by the rules. Tax evasion is far from a ‘victimless crime.’ People who underpay their tax are putting themselves at a disadvantage too. If you do not record all your income in your accounting system, you may find it harder to raise finance to sell your business for its true value or get full accident compensation if you are injured and off work.”
Hidden economy
“What is IRD doing about the ‘hidden economy?’
“We believe that it is important for people to get it right from the start. Over the past two years, we have released our Compliance Focus Document to make areas of concern very clear and assist people to meet their obligations. The Document can be found at www.ird.govt.nz (keywords: compliance focus).
