Pizza shop owner nabbed for $500k tax evasion

A Paraparaumu pizza shop owner was sentenced to 10 months’ home detention for more than half a million dollars in tax evasion.

Wenbin (Ivan) Shi was sentenced in the Porirua District Court on Thursday.

Shi operated SWB Foods Ltd (SWB), trading as Hell’s Pizza in Paraparaumu, since 2014.

Inland Revenue said Shi had “full knowledge and control over the tax obligations”.

He failed to file 25 GST returns and income tax returns for five years for SWB and failed to file personal income tax returns over the same period.

Shi also failed to pay 23 PAYE deductions to Inland Revenue.

Not a ‘victimless crime’

Judge Andy Nicolls emphasised the importance of deterrence and denunciation in determining the appropriate sentence.

Nicolls said offending against Inland Revenue was not a “victimless crime”.

Shi faced a representative charge of not providing GST, company and personal income tax returns.

He also faced another representative charge of aiding and abetting the pizza franchise by taking PAYE from staff wages and not passing it on to Inland Revenue.

When an Inland Revenue audit started in June 2024, SWB had a tax debt of $400,000.

During the audit, Shi’s personal bank accounts and those of SWB were also reviewed.

The review showed annual sales of between $687,708 in 2017 and $1,390,341 in 2024.

Shi stopped filing GST returns for SWB in 2020, and the outstanding GST was $185,143.86.

Shi operated SWB Foods Ltd (SWB), trading as Hell’s Pizza in Paraparaumu, since 2014. Photo / 123RF

Between April 2015 and April 2018, SWB largely filed and paid PAYE on time.

Between July 2019 and November 2022, Shi filed returns and took the money from staff wages but didn’t pay PAYE to Inland Revenue.

“PAYE arrears were deducted from the company accounts under Section 157 of the Tax Administration Act, and two statutory demands were issued, which together resulted in a portion of the PAYE arrears being paid,” Inland Revenue said.

The unpaid amount was $194,295.50.

An accountant filed income tax returns for five years between March 2015 and March 2019, but SWB’s accountant had no contact with Shi since 2022.

Shi failed to file five yearly income tax returns between March 2020 and March 2024. The estimated amount due was $124,415.77.

In November 2025 Shi filed all outstanding GST and income tax returns totalling $503,855.13.

He had repaid $100,000 before sentencing, resulting in a total loss to Inland Revenue of $403,855.13.