‘Full force of the law’: ATO’s stern warning over uptick in fraudulent GST refunds

Businesses and business owners have been put on notice to try and cheat Australia’s tax and superannuation systems, amid an uptick in fraudulent GST refunds. The Australian Taxation Office (ATO) warned businesses on Thursday to not get involved in related-party structures or schemes after the Serious Financial Crime Taskforce (SFCT) identified an increase in fraudulent claims for large GST refunds across a number of industries. In Australia, business owners are entitled to claim GST credits through periodic business activity or annual statements. But the ATO warned it had observed sophisticated arrangements between interrelated parties to “obscure transactions and disguise artificial or fraudulent arrangements”. The result was a purported high value GST refund, which the ATO alleged allowed “enablers and recipients” to fund further business ventures or personal purchases. The tax regulator said the SFCT had allegedly identified multiple specific groups “involved in commercial arrangements” seeking to exploit GST rules. Deputy Commissioner and SFCT chief John Ford warned businesses to act in good faith or face criminal prosecution. “Those who seek to defraud the tax and super systems will get caught and face the full force of the law,” he said. “We are equipped with resources, sophisticated data matching, analytics capability, and intelligence sharing relationships to uncover even the most elaborate financial crime. “We are targeting businesses who are participating in these schemes to ensure a level playing field for those who follow the rules.” Mr Ford said the behaviour not only put honest businesses at risk, but also took funding away from “vital community services such as hospitals, schools and transport”. The ATO urged anyone involved in illegal invoicing or financial arrangements to come forward and make a voluntary disclosure.