An Auckland man who runs a pizza outlet 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 April 2022 it was made an offence to acquire or possess ESST in New Zealand, and this was the first case of conviction.
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.
Singh runs a pizza outlet, Just Pizza, in Waiuku.
Singh’s offending was planned, calculated and required ongoing financial manipulation.
According to an Inland Revenue (IR) investigation, Singh’s offending was planned, calculated and required ongoing financial manipulation. As part of these investigations 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 4 staff including Singh, but PAYE returns indicated only 2 staff.
The total GST discrepancy from the offending is $78,777.09; income tax discrepancy is nearly $100,000; and the PAYE discrepancy is $21,337 – a total of just over $198,500.
The Judge ordered the start date of the sentence be deferred until 20 August to allow Singh to travel to Fiji for family funerals.
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. A civil penalty and two new offences were introduced in 2022 in relation to involvement with ESS tools.
The only purpose of ESST is 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 work 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.
