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Inland Revenue Commits to Deal with Value Added Tax Evaders

 Upon the conviction of any person for any subsequent offence (or offences), the maximum fine is increased to 1.5 million vatu or 1 year imprisonment and/or both.

 Furthermore, the VAT Office explains that VAT evasion in general terms can be defined as paying less tax than a registered person is legally obliged to. It happens when a business does not charge VAT when they should, or charges VAT but does not pay it to the VAT Office. A person or business may be evading VAT by:

 

  • Not being registered for VAT despite clearly exceeding the VAT threshold of 4 million vatu;
  • Using a VAT registration number that is false or belongs to someone else;
  • Using a false business name or address;
  • Not wanting to issue receipts and/or tax invoices;
  • Providing false invoices or tax invoices;
  • Not keeping proper VAT records;
  • Not recording all sales;
  • Not keying in the correct sale amounts in the cash register (tapes) machines;
  • Keeping two sets of financial accounts.

The VAT Office will continue to investigate suspected VAT returns and conduct VAT audits of high-risk refunds. VAT Auditors in the past 24 months have been trained to be tax investigators and will utilize all their skills to address this issue and the VAT Office confirms that all relevant supports including high level technical support will be provided to the Auditors.

For more information on any VAT issues, please contact the VAT Office by phone: 00(678) 24573 and 00(678) 37517 (Santo), visit us at our Office in Carnot Street, Port Vila or email us.