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Hair salon owner fined for tax evasion

The owner of a Prince George hair salon has been fined for tax evasion.

The owner of a Prince George hair salon has been fined for tax evasion.

Dragana Babic, who operates Charlie's Girl in Pine Centre Mall was fined $48,165 in Prince George Provincial Court this week after pleading guilty to one count each of personal income tax evasion, corporate tax evasion and failure to remit goods and services tax.

The fine, which must be paid by March 13, 2010, represents 75 per cent of federal taxes and unremitted GST evaded. Babic was also handed a 16 month conditional sentence.

A Canada Revenue Agency investigation of Babic's holding company, Lunido Holdings Co. Ltd., determined that a significant portion of the cash revenue from the business was concealed by not recording cash sales, having no cash controls or cash register, altering her own hand written accounting records and depositing cash from sales in personal bank and credit card accounts.

In total, Babic did not report $92,981 in corporate income, $13,777 in unremitted GST and $187,669 in personal income for a period beginning in 2004 through 2007, CRA said.

Those convicted of income tax fraud must still repay any amounts fraudulently received, plus interest and any civil penalties that may be assessed by the CRA. In addition, the court may fine them up to 200 per cent of the refund sought and impose a jail term of up to five years.

"Canadian taxpayers must have confidence in the fairness of the tax system," said Ric Mlynarczyk, CRA assistant director of enforcement for the northern British Columbia and Yukon tax services office. "To maintain that confidence, the Canada Revenue Agency is determined to hold tax evaders accountable for their actions."

Individuals who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs. They will not be penalized or prosecuted if they make a full disclosure before the CRA starts any action or investigation against them. These individuals may only have to pay the taxes owing, plus interest.

More information on the voluntary disclosures program can be found on the CRA's website at

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