Legislation to Secure $77m in Tax from Criminals

The Government today introduced legislation to ensure that wrongfully obtained money will continue to remain taxable, Revenue Minister Bill Birch and Treasurer Winston Peters said this afternoon.

They said the legislation applies to money or property stolen or gained through fraud, embezzlement and misappropriation. It prevents the loss of $77 million in tax from tax investigations already completed or under way.

'This amendment became necessary after a recent Court of Appeal decision held that stolen money and property were not income according to ordinary concepts?and so were not taxable,' the Ministers said.

'The Government has no intention of tolerating a situation where law-abiding citizens are taxed on their income, but criminals can avoid tax. We are changing the law to ensure that stolen money continues to be taxed.'

When enacted, the legislation will be backdated to 1 April 1989, to ensure that tax already paid on stolen money during that period does not have to be refunded to criminals.

'This legislation strengthens our hand further in our battle to curb the hidden economy, and ensure as far as practicable that economic activity which escapes measurement by official GDP statistics does not escape tax.'

The amount taxed will not include reparations made to the legal owner. The amendment will not apply to anyone who, before the amendment was announced on 6 March 1998, made a competent objection to misappropriated property being subject to tax.