Tony Harris’s protege, Grant Hehir, is tabling last few ANAO fearless reports before his well deserved retirement 150 ATO officials investigated in GST fraud scheme that was promoted via TikTok
150 tax officials swept up in GST fraud probe
No one is responsible for $2b GST debacle
Two years of committee meetings, $2 billion lost and still the ATO doesn’t know who should have picked up the fraud.
‘A position title that does not exist’
At least 150 ATO staff implicated in TikTok GST fraud
At least 150 Australian Taxation Office officials have been investigated over a far-reaching GST fraud scheme, with 12 terminated or facing criminal prosecution.
The extraordinary figure was revealed in an auditor-general’s report that found the ATO’s management and oversight of fraud control arrangements for GST is lacking, while its internal risk framework is not fit for purpose.
TikTok says it co-operated with the Tax Office to permanently ban more than 60 accounts that promoted GST fraud. (CDPP)
Outside the ATO, at least 100 arrests have taken place and so far at least 16 people have received a criminal conviction. Authorities estimate there have been more than 57,000 perpetrators of a TikTok GST fraud scheme, promoted on the popular social media app as a way to get a “loan” from the government. Individuals register a fake business, get an ABN, register for GST and then immediately file a Business Activity Statement claiming credit for previous, but not legitimate, GST payments.
Despite more than $81 billion in GST collections every year, this week’s auditor-general’s report warned oversight and reporting of GST fraud within the ATO is only partly effective, as internal roles and responsibilities are not clear.
An ATO spokeswoman said the majority of the 150 officials were former contractors or former employees and were not working with the ATO at the time of suspected fraud. Some were found to be victims of identity theft.
Action has been taken against 12 people who were substantiated as having committed the fraud while working at the ATO.
“This includes termination of contract, administrative action, and criminal prosecutions,” the spokeswoman said.
“As a result of our actions, we are not aware of anyone currently working at the ATO who is suspected of committing the fraud. The ATO has always treated fraud and corruption seriously and has zero tolerance for such behaviour.
“We expect all ATO staff and contractors to act with the highest levels of integrity, and we will take all reasonable measures to prevent, detect and deal with fraud and corruption risk to the ATO.”
In May 2022, the ATO announced it was cracking down on an $850 million GST fraud by 40,000 Australians. A month later, the Serious Financial Crime Task Force’s Operation Protego began executing search warrantstargeting 19 people, while estimates of the fraud had risen to $1 billion involving up to 70,000 people.
The new report said $2 billion in primary liabilities had been raised since Operation Protego got underway, with $2.7 billion in suspect GST refunds stopped before payment
More than 4700 tip-offs related to GST fraud have been received by the ATO since 2019-20.
Penalties of more than $120 million were issued before June 30 last year, with interest of about $220 million and continuing to accrue. As of August 31, the ATO said it had recovered $123 million, including $67.6 million recovered via bank garnishee notices.
The fraud was uncovered by Westpac and other banks, some of which passed on a series of alerts to the ATO from 2020. But after being frustrated by the apparent lack of action by the ATO, some bank staff shared their concerns informally with the Reserve Bank, which then alerted Treasury and the tax office in February last year.
Accountants in western Sydney, where the fraud went viral in mid-2021, have found new examples in recent tax returns, suggesting that the fraud activity is continuing.
The ATO agreed to five recommendations from the auditor-general, and has established a Fraud and Criminal Behaviours Unit to focus on further protecting against fraud.
In a statement, the ATO said it takes all fraud attempts seriously, and will work with the taskforce and other agencies to go after individuals suspected of doing the wrong thing.
