TAX FRAUD.................

Tax Fraud

Tax Fraud implies a person paying less tax or wrongfully asking for repayment of tax by acting in a dishonest way. Tax Fraud Tax is a deliberate act by a person and is not an act of negligence by the concerned person.

Fraud of Tax is a crime and as a result of it the government has to suffer great loss in revenue for the people submit less money as tax to the government. A person goes for Tax Fraud for he wants to pay less money to the government as tax and save more money for himself. As a result of Fraud Tax, the government has less revenue and so can spend less money on the development of schools, infrastructure, pensions, health services, and various other services.

The various ways of Tax Fraud are when a person does not tell the Income Tax department about their correct income, when businesses do not declare all or part of their profits, when employers pay their employees without operating the system of PAYE, and when businesses charge VAT from their customers illegally. The other methods of Tax Fraud are when businesses do not register for VAT when the businesses should be registering themselves, when the retailers import products like tobacco and alcohol without making the necessary payment for Excise Duty, when individuals do smuggling of goods under which the person exports or imports foreign goods through illegal routes.

Smuggling is a method of Tax Fraud for it helps in the total evasion of the customs duties that are applicable on the goods and is also done for importing items that are contraband. Tax Fraud is also done by the traders who create huge unpaid liabilities of VAT tax and also make false claims for VAT repayment. Fraud Tax is done by businesses when they function without registering with the Income Tax department and as a result they make no payment of taxes. Some businesses register themselves with the Income Tax department but do Tax Fraud by declaring only a part of their income. Tax Fraud is a crime and so the government prosecutes the person who commits it by imposing fine or by the way of imprisonment.

Tax Fraud must be avoided at all costs since it is an illegal activity and if found guilty, a tax offender can be subject to imprisonment or fine.