Employer Jailed For Failing To Withhold Tax

Dated: August 2006

A Queensland employer has been sentenced to three and a half years jail by the District Court in Cairns for failing to withhold more than $600,000 in tax from the wages of 44 workers.

The employer was found guilty on five accounts of defrauding the Commonwealth. Despite having been notified by the Tax Office in July 1995 that the workers were employees rather than sub-contractors and that tax must be withheld and remitted to the Tax Office, he made cash-in-hand payments between September 1995 and June 2000.

A joint investigation with the Australian Federal Police, Centrelink and Immigration revealed his failure to comply with this direction and he also breached workers compensation, superannuation and Centrelink requirements.

The Tax Office will be examining more closely PAYG withholding, superannuation and Fringe Benefits Tax of employers this year to assist them in meeting their obligations.

Source: Tax Office Media Release Nat2006/22, 30 June 2006.