Auckland hospitality operator Gurwinder Singh has become the first person to be convicted for aiding electronic sales suppression tools.
An Auckland man has become the first person in New Zealand to be convicted and sentenced for aiding and abetting his company's possession of electronic sales suppression tools (ESST).
In response to the growing threat of these digital tools, stiff measures were introduced in April 2022 and made it an offence to acquire or possess ESST in New Zealand.
Gurwinder Singh was sentenced in the Manukau District Court on 15 July to seven months' home detention on tax evasion charges and a charge of aiding and abetting his company for possessing electronic sales suppression tools for the purpose of evading the assessment and payment of tax.
The Judge ordered the start date of the sentence to be deferred until 20 August to allow Singh to travel to Fiji for family funerals.
Singh runs a pizza outlet, Just Pizza, in Waiuku. As part of an Inland Revenue investigation, searches were carried out at his home and business addresses, and bank records obtained.
During an interview, Singh admitted he was hiding income from his tax agent so that he didn’t have to pay so much tax.
Ex-employees confirmed the pizza business employed four staff, including Singh, but PAYE returns indicated only two staff.
The Inland Revenue said Singh’s offending was planned, calculated and required ongoing financial manipulation.
The total GST discrepancy from the offending is NZD 78,777.09; income tax discrepancy is nearly NZD 100,000; and the PAYE discrepancy is NZD 21,337, a total of just over NZD 198,500.
The threat that ESST pose to the integrity of the tax system is significant and Inland Revenue has an obligation to honest businesses to stamp out its use.
There’s no other purpose to ESST other than to facilitate tax evasion or money laundering. They’re being used globally to systematically alter point-of-sale data collected to understate or completely conceal revenue to evade tax.
ESST works by targeting the integrity of transactions, software, internal memory, external filing, or reporting to delete, change, or simply not record selected sales data and transactions.
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