ATO issues stern warning to business owners claiming dodgy GST refunds
The Australian Tax Office (ATO) is cracking down on business owners cheating the GST system.
Businesses who pocket fake GST refunds are on the rise and the Serious Financial Crimes Taskforce (SFCT) has issued a stern warning after spotting a huge spike in fraudulent claims.
Business owners in Australia are entitled to claim GST credits through periodic business activity statements or annual returns.
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The Australian Tax Office said it is cracking down on GST fraud. AFR/ Luis Enrique Ascui
However, the ATO has found some business owners partake in schemes or arrangements to cheat the system and earn more in refunds.
The GST refund system is exploited by those who "obscure transactions and disguise artificial or fraudulent arrangements", the ATO said.
The dodgy refunds are then being used to further business ventures or for personal purchases.
Deputy Commissioner and SFCT Chief John Ford warned businesses to act in good faith or face criminal prosecution.
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Business owners who pocket the dodgy refund have been issued a warning. Getty Images/iStockphoto
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"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 the 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."
The ATO found thousands of people participated in a major GST fraud between 2022 and 2023. Louie Douvis/AFR
Ford said the false GST refunds put honest businesses at risk and took funding away from vital community services.
More than 57,000 people, including individuals, are believed to have participated in a major GST fraud which fleeced the tax office out of $2 billion between April 2022 to June 2023.
The Australian National Audit Office discovered about 150 tax office staff were suspected of being involved in the scam as of October 2023.
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