An Australian court ruled on Wednesday that a convicted heroin dealer can claim a Aus$220 000 (about R1,02-million) tax deduction for money that was stolen during a drug deal.
The Australian Taxation Office (ATO) lost a bid in the High Court to overturn a lower court decision that Francesco Dominico la Rosa of Perth, the capital of Western Australia state, could write off the money as lost income.
The ATO had been trying to make La Rosa — who served a 12-year jail term for dealing heroin and amphetamines — pay tax on his 1994/95 income, which it estimated at Aus$450 000 (R2,09-million).
But La Rosa insisted his taxable income should be reduced because half that sum had been stolen.
The Aus$220 000 had been buried in La Rosa’s backyard and was dug up to spend on a drug deal in May 1995, but was stolen during the transaction by unknown people, the court was told.
The ATO had argued it was against policy to allow stolen money as a tax deduction.
The federal government has vowed to change the law to bar losses incurred in deriving illegal income from being claimed as tax deductions in the future. — Sapa-AP