The District Court has sentenced computer systems analyst Raymond Chan to seven months' jail, suspended for three years, and fined him $556,000 for profits tax evasion.

Chan set up partnership business Metroware Company in 1992 and was responsible for its management and operation. However, he omitted most of his service income totalling $1,858,262 from the company's profits tax returns for 1995-99, evading $271,332 in tax.

He stated in the profits tax return for 1998-99 that the company ceased business on February 9, 1999. An Inland Revenue Department probe found that the business continued to receive service income as usual in 1999-2001, but the department was not informed in writing of the company's chargeability to profits tax. The total amount of assessable profits was $351,854 and the resultant tax undercharged was $52,777.

Chan was earlier convicted of evading profits tax and failing to inform the department in writing of his chargeability to profits tax. He was fined $540,000, representing about 200% of the tax evaded and $16,000 for failing to inform of his chargeability to profits tax.