An Auckland couple used their children as "puppets" in their business during a $431,000 tax evasion scheme, says a judge.
In the Papakura District Court this week, Tamanini Muaiava and his wife Uputaua Muaiava were sentenced on 65 charges each of evading or attempting to evade the assessment or payment of goods and services tax, and PAYE.
Tamanini was jailed for 21 months and Uputaua sentenced to nine months' home detention.
In a statement today, Inland Revenue spokesman Tony Morris said the pair jointly operated businesses supplying labour to agricultural growers in South Auckland.
When they were confronted about one company's failure to pay tax, that company would be wound up and a new company incorporated to continue their trading, he said.
"On at least three separate occasions they used one of their children as sole director and shareholder in a company. The sentencing judge noted the children were 'enlisted as mere puppets for the ongoing business'."
The couple's various companies kept few records and traded mostly in cash for both income and expenditure and IR has had to reconstruct income from invoice records.
The total tax evaded was about $431,644.66.
In his judgment, Judge Gerard Winter accepted Tamanini felt pressure to pay his workers and may have tried to help them by giving extra money for events, such as family funerals.
However, the judge didn't accept either Tamanini, who has previous tax convictions, or his family made no financial gain from his tax evasion.
Judge Winter said there is a clear connection between Tamanini's personal, family, community and Samoan cultural background, to ensure harvesters were paid, which explains but couldn't excuse his offending.
While English is a second language for Tamanini, Judge Winter rejected any claim of misunderstanding about his tax obligations.
He also accepted both Tamanini and Uputaua's deep sense of shame and profound remorse.
Morris said the offending was theft from the community and a gross abuse of trust.
"The offending not only involved the deliberate failure to file GST and PAYE returns, but also the careful use of new companies to continue trading in the same business, with the same primary customers and in the same way," he said.
"It's why the judge found their offending was premeditated, repetitive and deliberate. While the couple are of modest means and have few assets or [don't] exhibit a lavish lifestyle, their family accepted considerable income from this tax fraud."