What is tax crime?

Atul Mehta from Moore Stephens Markhams Chartered Accountants discusses what is considered as tax crime and the Inland Revenue Department’s efforts to address it. Download the article in Contact September 2016 here.


Tax crime happens when people cheat the tax system through deliberate and dishonest behaviour with the aim of obtaining financial benefit. These people are considered tax criminals.

While most people are honest and pay tax on all their income, there are some who intentionally avoid paying tax or claim money which they are not entitled to.

Some common ways businesses and individuals cheat the tax system include:

  1. Over reporting the business expenses
  2. Doing some jobs “under the table” and not reporting that income
  3. Not declaring their income at all.


Preventing tax crime

The Inland Revenue Department take serious steps to prevent people from committing tax crimes and to make sure everyone pays their share of tax.

These steps include:

  • Making tax rules and processes simple
  • Educating people and providing tools to help get it right
  • Working with tax payers who get it wrong and helping them put it right
  • Advising taxpayers of areas they are interested in investigating and offering them the chance to come forward and put it right
  • Using data to detect tax evasion and fraud
  • Auditing people or businesses when they want more detailed information about how they manage their tax affairs
  • Charging penalties or prosecuting people who cheat the tax system
  • Getting taxpayers help to ensure everyone pays their fair share of tax.


The Inland Revenue Department employs numerous types of tax penalties depending on the type of tax offences committed.Here is a list of some of the very common offences where the penalty regime applies:

  • Absolute Liability Offences. These include failing to keep the books and documents as required by law.
  • Knowledge offences – knowingly breaching tax obligations.
  • Evasion and similar offences. Certain actions are regarded as tax evasion offences if they are done to evade the tax liability.
  • Obstructions. Obstructing the Inland Revenue Department from carrying out their lawful duties.
  • Aiding or abetting.
  • Employees and Offices – where an employee, agent or taxpayer commits an offence.
  • Student Loan offences. This can lead to arrest at the border and you may have seen cases of this in the media recently.


If you are concerned about your taxes, get in touch with us today, or the Inland Revenue Department directly to discuss the appropriate steps to take.

Serious about your success?