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The Australian Taxation Office (ATO) has sent a strong warning to those involved in GST fraud.
The ATO said there has been an increase in GST fraud and it will take strong action, to respond to significant fraud involving participants inventing fake businesses to claim false refunds.
Sophisticated risk models deployed by the ATO, coupled with intelligence received from banks including through the AUSTRAC-led Fintel Alliance and the Reserve Bank of Australia, identified a recent spike in suspicious refunds.
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 being $20,000. We are working with financial institutions that have frozen suspected fraudulent amounts in bank accounts. The ATO has also stopped many more attempted frauds.
The fraud involves offenders inventing fake businesses and Australian Business Number (ABN) applications, many in their own names, then submitting fictitious business activity statements in an attempt to gain a false GST refund.
The ATO is reminding the community that the ATO does not offer loans and said if the public is aware of someone advertising a way to get a loan from the ATO, it is a rort. It also advised that it does not administer government disaster payments, and that only businesses need to get an Australian Business Number.
The office has also issued a list of activities that will flag any illegal behaviour including backdating when a fake business is set up to seek a refund that will flag the person as high risk.
It also advised that false declarations may impact eligibility for other government payments.
“We have the data matching ability to detect these patterns and stop the fraud,” said ATO deputy commissioner and chief of the Serious Crime Taskforce, Will Day.
“Stealing from the ATO is not a victimless crime, you are stealing from people in need of government support and people using public services such as schools and hospitals. The ATO shares information with a range of government partners when responding to fraud, including law enforcement agencies.
“If you engage in tax fraud, you will be caught. The ATO is working closely with law enforcement agencies to prioritise criminal action against those who have established and induced participation in the fraud.”
Mr Day said information on how to attempt the fraud is being shared online including via social media platforms.
“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,” he 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.
“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.”