A Christchurch man has been sentenced to 10 months' home detention after admitting to failing to pay more than $200,000 of his workers' taxes to Inland Revenue.
Frederick Mario Mau Epiha pleaded guilty to 16 charges of aiding and abetting a company he set up to knowingly apply PAYE deductions in the Christchurch District Court on September 30.
The court was told of Epiha's "phoenix-type behaviours" – a practice where a company rebrands itself to hide its failures or financial instability.
Epiha worked as a manager for Asia Pacific Group Ltd (APG), before reestablishing the business under new company Redemption Solutions Ltd (RSL) in May 2022 without changing or addressing compliance behaviour.
"Epiha knew of APG’s tax arrears but incorporated RSL to take over APG's trading business and continued to operate the business in a similar manner to APG," the IRD said.
RSL was incorporated as an employment services company operating out of Auckland and Christchurch on May 4, 2022. Epiha served as its sole director from October 22 that same year.
While RSL was required to file PAYE returns each month between May 2022 and March 2023, the IRD said the company was "tax non-compliant from the outset".
"Epiha failed to pay the full amount between August 2022 and April 2023, leaving an unpaid PAYE of $215,043.24."
The company was placed into voluntary liquidation by shareholder resolution in April 2023.
"The court was told the real victims are New Zealand taxpayers and that offending of this nature poses a threat to the integrity of the tax system," the IRD said.
"Offending of this kind also creates an unfair financial advantage over other businesses in the same industry, potentially encouraging other industry participants to commit the same offending to compete on a balanced playing field.
"The PAYE offending was deliberate, premeditated and repeated. It continued despite warnings from Inland Revenue and confirmation from Epiha that he knew RSL's failure to pay its employees’ PAYE to the Commissioner was a criminal offence."
The former director of APG, Melanie Tatana, was sentenced to three years behind bars last year for failing to pay IRD more than $1.6 million of PAYE between 2019 and 2022.
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