The IRD had sent numerous reminder notifications for unfiled GST and income tax returns. Waikari was also given early repeated education from the IRD about his tax obligations, including two business advisory visits.
Nonetheless, the company did not file income tax since its incorporation, or GST returns since September 30, 2014, and Waikari failed to file personal tax returns for the years ending March 31, 2015 up to and including March 31, 2020.
The IRD investigated and issued the company with a notification on December 4, 2020, requesting information from Waikari. He did not provide it.
The investigator got bank records and information from third parties confirming they had purchased fish from him and the sums paid out, including GST.
That information enabled the IRD to calculate the sales and tax owing for each GST period. It revealed an estimated total of $216,152.05 in evaded tax.
The IRD made numerous attempts to contact Waikari until they eventually managed to reach him by phone. Waikari said he would provide the necessary information but didn’t. He was invited to a voluntary interview but didn’t go.
A production notice was sent to Port Nicholson Fisheries, resulting in a payment of $27,313.51 to IRD, which was credited to EFL’s tax debt. Waikari made no voluntary payments.
Given that, Waikari would have been liable for reparation totalling $188, 821.54 had the IRD sought it.
Subsequently charged, he was sentenced on Tuesday having pleaded guilty to three representative charges under the Tax Administration Act 1994.
He admitted knowingly failing to provide the Commissioner of Inland Revenue with intent to evade an assessment and payment of tax by:
• aiding and abetting offending by his company Elohim by knowingly failing to provide 10 GST returns
• similarly, that he aided and abetted offending by his company by knowingly failing to provide six income tax returns
• and that he personally failed to provide six income tax returns.
Counsel Heather Vaughn said Waikari accepted a term of imprisonment would be the sentence starting point for his offending and could also be the end sentence. However, Ms Vaughn advocated for home detention and community work, saying it would be a sufficient deterrent in Waikari’s case.
He had not gained anything material from the offending, with no wealth or assets such as vehicles to show for it. He had used the money to pay off debt and bills.
Judge Cathcart accepted that. However, he noted it was also to Waikari’s benefit. Had he gained more materially the outcome for him at sentencing would have been different.
And in a sense he had gained a benefit because his years of offending undoubtedly meant he would have had an unfair commercial advantage over law-abiding competitors, the judge said.
Tax evasion wasn’t a victim-less crime. The tax system relied heavily on the honesty of tax payers and offending like this undermined its integrity.
“It’s a fraud and theft on the community,” Judge Cathcart said.
Waikari’s offending was aggravated by the premeditated, repetitive nature of it and its six-year duration. It wasn’t as though Waikari was not aware of his obligations. His offending was deliberate, the judge said.
The sheer scale of it justified a “significant” starting point.
He set the sentence starting point at 24 months imprisonment, in line with the IRD’s submissions.
There was a full 25 percent discount (six months) for Waikari’s guilty pleas and two months discount for Waikari’s personal circumstances.
A Section 27 Cultural Report mentioned several background factors that could have indirectly contributed to Waikari’s offending but it was his longstanding dependence on alcohol that really had a causative link to his offending, the judge said.
The judge noted Waikari had “incredibly” started drinking alcohol when he was aged between eight and 10 and had started using cannabis when aged somewhere between 10 and 12. He had no doubt turned to those substances as a way of dealing with the other background issues in his life.
A non-custodial sentence was appropriate given Waikari had shown insight into his offending and begun to take steps to address it, and had been compliant on a previously-imposed sentence of home detention, which he was currently serving for an unrelated matter. That sentence was cancelled due to this one.
