Evading tax leaves taxpayers open to all undeclared taxable revenue being confiscated as proceeds of crime together with any assets purchased with this undeclared income. In a pre-emptive strike, police seized a motor vehicle and cash following alleged tax evasion by Jamal Nasser Nabawi.
Police pounced on Nabawi for alleged tax evasion when investigating other suspected criminal activity. Probing Nabawi’s financial affairs, police identified $1.3 million had passed through his business and personal bank accounts at a time when first he was working at Countdown earning $11,300 per year and then in subsequent years when he declared for a four year period total income of $10,300. Police allege just over one million dollars of the money passing through his bank accounts was revenue received by a company called Premium Plasterboard NZ Ltd which was not declared for tax purposes. Nabawi was sole director of Premium Plasterboard.
Nabawi argued proceeds of crime legislation does not apply to tax evasion. Tax evaders do not gain a ‘benefit;’ they avoid a liability, so long as any tax evasion goes undetected.
Tax evasion attracts substantial criminal sanctions: up to five year’s imprisonment following knowing failures to pay tax in excess of $30,000. Tax evasion qualifies as ‘significant criminal activity,’ Justice Duffy ruled. This brings proceeds of crime legislation into play.
Seized as suspected proceeds of crime were a Toyota Hilux van, $58,400 cash found in the van and the balance of Nabawi’s personal ANZ bank account. The High Court was told this bank account held $107,400 as at September 2020.
It is still to be proved whether Nabawi was guilty of tax evasion and if so whether the seized assets should be forfeit.
Commissioner of Police v. Nabawi – High Court (15.09.21)
21.154