Ministry of Finance emphasizes tough stance on tax fraud

The Ministry of Finance yesterday emphasized that providing false information in tax filings was a violation of the Income Tax Law (所得稅法) and warned that tax evaders would be fined, in addition to being required to pay back any tax payments they had avoided.

The ministry's statement followed Chinese-language media reports yesterday that Yahoo-Kimo managing director Rose Tsou (鄒開蓮), among other business executives, had been implicated in a tax evasion case involving mortuaries in Yunlin County.

The reports said the Taipei branch of the Ministry of Justice's Investigation Bureau suspected Tsou of purchasing memorial tablets at a low price, acquiring forged receipts from the seller indicating higher prices, and submitting these in her tax filing to deduct the amount from her income as a donation.

Tsou is suspected of having evaded at least NT$10 million (US$303,000) in tax payments, the reports said.

A tax official said yesterday that tax evaders needed to pay back taxes and would also be fined according to the seriousness of the case. No legal responsibilities would be imposed, however, the official said on condition of anonymity.

Reports said that Lin Wen-sheng (林文生), the chairman of a company called Chuyu Culture (珠友文化) and an estate agent in Yunlin County, was questioned for his alleged role as a broker in a tax evasion scheme.

Wealthy businesspeople allegedly bought shrines to donate them to a township office. They were "refunded" 70 percent of the price listed on the receipts they submitted for tax purposes. Prosecutors estimate the scheme helped suspects avoid NT$330 million (US$10 million) in taxes in 2005 alone.

Using fraudulent receipts for donations to claim tax deductions has become an increasingly popular trick, the ministry official said, adding that the ministry had demanded that local tax administrations be on their guard for fake receipts.

Lin has been a mortuary broker since 2004. In the tax evasion case, he allegedly colluded with four mortuary owners and two brokers named Chang Hsiu-yueh (張秀月) and Yung Chiang-yuan (翁江源) to find potential buyers.

Lin introduced Tsou and 57 other customers to the owners. They then purchased tablet shrines costing NT$88,000 (US$2667) a piece from Chang Ming Life Technology (長明生命科技), the media reports said, citing prosecutors.

The prosecutors Office has summoned Lin, Lin's wife Tsai Hsueh-li (蔡雪李), Chuyu Culture manager Lin Chiu-hung (林秋宏) and other staffers and chairman of the mortuaries involved for questioning.

Tsai has been released on NT$100,000 (US$3030) bail.

Investigators say Tsou had been purchasing tablet shrines from Chang and other brokers for NT$22,000 (US$667) a piece since 2004. She then donated the tablet shrines to Taipei County's Wanli Township Office and claimed the tax deduction, the reports said.