ATO targeting GST fraud

The Australian Taxation Office (ATO) has announced that it is investigating and taking strong action against those are involved in GST fraud, wherein fake businesses are being set up, complete with Australian business number (ABN) applications under the fraudster’s name, in order to claim false GST refunds by submitting fictitious Business Activity Statements.

The ATO, through Operation Protego, is investigating around $850 million in potentially fraudulent payments made to around 40,000 individuals, with the average amount fraudulently claimed at $20,000.

The ATO has called on the public not to get involved in such activities and has asked those involved in GST fraud to cooperate with the authorities or face tough actions from the agency.

The ATO is also coordinating with financial institutions that have frozen suspected fraudulent amounts in bank accounts. It is working closely with law enforcement agencies to prioritise criminal action against those who have established and induced participation in the fraud.

Already, the ATO has halted a number of attempted frauds with the help of intelligence received from banks including through the AUSTRAC-led Fintel Alliance and the Reserve Bank of Australia, which identified a recent spike in suspicious refunds.

“We are working with social media platforms to help remove content promoting this fraud, but if you see something that sounds too good to be true, it probably is,” ATO Deputy Commissioner and Chief of the Serious Financial Crime Taskforce, Will Day, said.

The ATO is stressing that the people who have participated in this fraud cannot remain anonymous and that it will take action against these people.

“We are urging anyone involved to face the music and come forward now rather than face even tougher consequences later, including penalties and criminal charges,” Day said. “Unfortunately, as we take action to protect revenue some legitimate taxpayers may find they have to take extra steps to receive their legitimate refunds as we have put extra controls in place as a result of this fraud. But we must emphasise that the fraudsters are not real or legitimate small businesses.”

“People who have participated in this fraud may have unwittingly followed advice they have read online, claiming to help access a loan from the ATO, or receive other financial government support such as a disaster payment,” Day added. “However, for others there was nothing accidental or unintentional about setting up a fake business in their own name and seeking an unearned refund. Circumstances where there were deliberate attempts to defraud the ATO or a refusal to organise repayments will lead to tougher actions including criminal action.”