ATO reveals 174 criminal convictions amid ongoing GST fraud crackdown

The Australian Taxation Office secured 174 criminal convictions for tax-related fraud in the last financial year, while the stunning trend of GST fraud popularised on social media suggests even more prosecutions are on the way.

The ATO on Wednesday revealed the final tally of its 2022-2023 enforcement actions pertaining to tax fraud, an eternal challenge for the federal revenue collection service.

In total, 177 prosecutions resulted in 174 criminal convictions and 11 custodial sentences, the tax office said.

The tax office raised over $2.1 million in fines as a result of those actions.

The ATO said those offences included classic tax crimes like money laundering and old-school offences like forgery.

Elsewhere, offenders obtained financial advantage by deception and made false or misleading statements pertaining to their tax obligations.

Notably, some offenders were penalised for a failure to lodge tax, BAS, and FBT returns.

The ATO’s no-nonsense approach to failed lodgments marks a reversal from its pandemic-era tactics, which were defined by leniency towards taxpayers struggling to stay on top of their obligations.

Penalising those who abuse Australia’s taxation system is important to protect the nation as a whole, the tax office wrote on social media.

“It takes money out of the hip pockets of all Australians by reducing the funding that can be allocated for services such as health, education, defence, welfare – the services many of us rely on, and the very thing our tax revenue supports.”

Although the ATO is highlighting its successful prosecutions over the past financial year, the true scale of the GST fraud phenomenon, which has only become clear in recent months, suggests an even greater custodial crackdown in the months ahead.

The scam, which gained a foothold through viral social media videos, falsely suggested taxpayers could use dummy ABNs to claim GST discounts for business purchases that did not exist.

Operation Protego, a joint operation between the ATO and the Australian Federal Police targeting GST fraudsters, resulted in 87 arrests as of February this year.

At the time, the ATO suspected fraudsters of siphoning $1 billion through the fake GST refund ploy.

In August, it was revealed the total of funds claimed through the scam was $4.6 billion, although not all of that was paid out by the tax office.

A month later, a Mildura man accused of filing false business statements and claiming $837,437 in GST refunds was sentenced to 7.5 years in prison.

Addressing the media at the time, ATO deputy commissioner John Ford suggested further prosecutions are on the cards.

“GST fraud is not a victimless crime, and we continue to work closely with state and federal law enforcement agencies to bring offenders to account,” Ford said.