Consistency of Sentencing in New Zealand's Tax Evasion Prosecutions

Abstract

The public must believe that the laws of a country are legitimate. To assist with this, the present paper investigates the parameters considered by the judiciary when deciding on the appropriate degree of sanctions by analysing the selected published legal cases.

The stratified random sampling method was utilised to select the cases. The qualitative data analysis package NVivo 12 was used to analyse the evasion cases. The paper examines 70 tax evasion cases from 2007 to 2022.

The reference to various cases in the present research demonstrates that the non‑custodial sentences were imposed on taxpayers who had pleaded guilty at the earliest opportunity; were of good character; took responsibility for their actions; were cooperative with the Inland Revenue Department (IRD); had severe medical issues; had no previous convictions; were the sole income earners in their family or did not use the evaded money themselves. A custodial sentence was imposed when the taxpayers did not show remorse for their actions; had gone to extreme lengths to conceal their offending; had previous convictions; did not cooperate with the IRD and had used the proceeds of their crime to fund a luxurious lifestyle. The prison sentences for the tax evaders convicted under the Crimes Act 1961 were much higher. The issuance of a reparation order depended on the taxpayers’ financial circumstances. Further, the analysis found that in the cases involving “pay as you earn” tax (PAYE), income tax and Goods and Services Tax (GST), the courts treated the GST and PAYE more harshly than income tax. It is asserted that this research will give an overview for policymakers or tax authorities to consider if looking at sentencing.