Prime Minister Anthony Albanese has vowed to raise the issue of the owners of holiday rentals or Airbnbs claiming tax deductions for the property for the full year, even when they are not being used for the entire 12 months.
Data could end year-long holiday home tax breaks
Set to hand over to his successor Rob Heferen next month, Mr Jordan told the National Press Club in Canberra waves of new cyber threats and identity scams kept him awake at night, defending the ATO’s management of a massive GST fraud which implicated 150 staff and contractors.
Give the ATO law enforcement powers: Chris Jordan
The Tax Office should be given new law enforcement powers to pursue fraud and illegal activity, outgoing commissioner Chris Jordan says, revealing some $630 million had been illegally removed from self-managed retirement accounts in just two years.
Set to hand over to his successor Rob Heferen next month, Mr Jordan told the National Press Club in Canberra waves of new cyber threats and identity scams kept him awake at night, defending the ATO’s management of a massive GST fraud which implicated 150 staff and contractors.
Outgoing taxation commissioner Chris Jordan finishes in the role at the end of the month. Alex Ellinghausen
Mr Jordan has previously advocated for the ATO to be designated as a criminal law enforcement agency. He said on Wednesday the United States Internal Revenue Service and other tax agencies overseas had investigative powers.
ATO officials had been excluded from a meeting of the J5 joint tax agencies due to insufficient powers. The group includes tax authorities from the US, Britain, Canada and the Netherlands.
“What is of concern to me now is what I refer to as the industrialisation of identity theft through large-scale cyber breaches,” Mr Jordan said.
This is scary stuff.
“The criminals are smart. But we’ve just got to keep ahead.”
The ATO released data showing in 2020, an estimated $380 million of superannuation savings were illegally withdrawn by trustees of self-managed super funds. Officials stopped another $125 million being withdrawn through new registrant risk reviews.
In 2021, more than $255 million of super was illegally accessed, while $170 million was stopped from withdrawal.
In the two-year period, SMSFs were found to have entered into more than $200 million in prohibited loans. To date, more than 75 per cent of the loan amounts have been repaid.
Mr Jordan said the illegal behaviour needed to stop.
“Super is for retirement. If people are experiencing genuine hardship, there are rules in place for when you can legally access super to help,” he said.
“I want to make this clear: we don’t set and forget when it comes to managing compliance. From multinational tax avoidance to SMSF trickery, we try to be ahead of the game.”
A recent Auditor-General’s report revealed 57,000 people stole about $2 billion through made up GST refund claims, after the scam activity went viral on social media platform TikTok.
Action has been taken against 12 people who were found to have committed fraud related to dodgy GST refunds while working at the ATO. Mr Jordan confirmed termination of contracts, administrative action, and criminal prosecutions were under way.
Mr Jordan said it was time for consideration of new regulation to govern the activities of the big four accounting firms, part of the ongoing fallout from the PwC tax leaks saga.
He said states and territories had a role in the regulation of partnership structures, like those used at firms including PwC.
“I think the PwC issue has really shone a light on what should be the governance arrangements, what should be the regulatory functions.”
Mr Jordan echoed concerns from ASIC chairman Joe Longo that the corporate regulator could only consider a small part of the activity of the big four firms, and the ATO could only consider partners as individual taxpayers.
“So it is worth a discussion,” he said. “I’m not sure a stand-alone regulator is the answer to that, but it is certainly worthwhile investing time and effort to see what is possible.”
Find out the inside scoop about Accenture, Deloitte, EY, KPMG, PwC and McKinsey. Sign up to our weekly Professional Life newsletter.
Tom McIlroy is the Financial Review's political correspondent, reporting from the federal press gallery at Parliament House. Connect with Tom on Twitter.Email Tom at thomas.mcilroy@afr.com