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Friday, August 21, 2026

Australian Taxation Office cracks down on dodgy distilleries flooding market with cheap vodka

French tax authority says break-in exposed data of 600K, including some private messages 
Stolen details range from contact information to household finances and withholding ratesFrance's tax authority says attackers may have stolen the contents of messages exchanged with hundreds of taxpayers during the data raid it confirmed last week. 
In an update published this week, the General Directorate of Public Finances (DGFiP) said lists of messages exchanged with the authority were exposed. For around 250 people, the compromised information also included the messages themselves. Slightly more than 350,000 individuals were affected. The other exposed data included tax identification numbers, marital status, email and postal addresses, and phone numbers.
 Tax records also exposed details such as household composition, number of dependents, family quotient, reference tax income, and withholding rates. Beyond the personal and tax information, DGFiP said the other affected datasets contained information that was already publicly available.

 

 

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The sale of the Obeid family farm 'Cherrydale Park' resulted in a drawn-out tax appeal. Photo: Tracey Nearmy/AAP PHOTOS

A notorious family running out of money to pay lawyers has had a decade-long appeal over a multi-million-dollar tax bill thrown out for persistently breaching court orders.

Eleven relatives of corrupt former Labor powerbroker Eddie Obeid failed to stop a tax office bid to toss their appeal.

The Federal Court ruling on Thursday brings an end to a case first filed in 2014 and then delayed to allow numerous corruption and criminal inquiries against members of the family to conclude.

Judith Obeid (right) the wife of Eddie Obeid (left) has had her tax bill appeal tossed out of court. (Joel Carrett/AAP PHOTOS)

Family patriarch Eddie Obeid and son Moses were jailed in 2021 for seven and five years respectively for conspiracy to commit misconduct in public office.

The offence related to a corrupt deal to sell the family farm Cherrydale Park to a coal company.

The duo are not party to the tax proceedings.

The 11 relatives, including Eddie's wife Judith and son Edward Jr, were challenging a tax office decision that said they owed tax from the $30 million sale of Cherrydale.

With the appeal hearing set to begin in 11 days, Justice Geoffrey Kennett found the family failed in its duty to comply with court orders for months.

The judge's associate sent the family three separate emails in June and July asking for details of the progress being made to file written submissions.

No response was received, other than an email from their previous solicitor saying he was no longer acting for the family.

Eddie Obeid's criminal lawyer Michael Bowe later told the court the family did not have the resources to hire counsel for the hearing, so it should either be delayed again, or start with no written submissions or witness lists.

"Technically, this is correct, however it is not a proper approach to complex litigation," Justice Kennett said on Thursday.

"For a party to put the court in a position to proceed in such a way would be a breach of their obligations."

Justice Kennett outlined multiple occasions where requests for documents or evidence were ignored.

"(The family) have been calculated and recalcitrant in their non-compliance to orders of the court," he said

The Independent Commission Against Corruption found in 2013 that Eddie and his son Moses had corruptly arranged with former Labor mining minister Ian Macdonald to create a coal tenement over the farm.

The Obeids ran their finances through a series of trusts which could be labelled "shams", ICAC found.

In the notice of tax appeal filed in 2014, Edward Jr argued profits gained from the farm sale were not "ordinary income" and should not be included in the taxable income of the family trust.

Eddie Obeid, 82, was released to parole in August 2025 after serving three years and 10 months. 

The former upper house MP whose 20-year career ended in 2011 also served jail time for corrupt conduct related to outlets in whichhis family held financial interests.

Moses was paroled in 2024.

Former Labor mining minister Ian Macdonald, who was also found guilty over the same conspiracy, is eligible for parole in January.

Australian Associated Press

Australian Taxation Office cracks down on dodgy distilleries flooding market with cheap vodka

The Australian Taxation Office has launched a crackdown on distilleries rorting a $400,000 tax scheme, with cheap vodka flooding retailers at below-tax prices.

Dodgy distilleries are flooding retailers with offers of cheap vodka as the Australian Taxation Office cracks down on a loophole that has cost it tens of millions of dollars. 
The ATO will increase scrutiny from October on alcohol companies taking advantage of a $400,000 tax break. 
The excise remission scheme was set up five years ago to allow smaller distilleries making vodka, gin and whisky to break into the market. 
But in a massive own goal, a News Corp Australia investigation in June revealed the scheme was being rorted.
The scheme was also implicated in bar wars, as organised crime groups firebombed venues in a bid to take control of their businesses to sell their tax-free alcohol and launder money.
A batch of 11,000 bottles of vodka, the maximum amount allowed under the remission scheme, can be made in as little as two days. 
ATO Deputy Commissioner 
Dr Rowan Fox.
Some operators were then simply setting up a new company in a relative or friend’s name and then claiming the rebate again.
That allowed them to sell bottles of vodka for as little as $12 – less than half the value of the $27.99 tax on a 700ml bottle of spirits. 
The ATO, which had been accused of allowing millions of dollars of tax evasion to go unchecked, announced a crackdown on Tuesday. 
ATO Deputy Commissioner Dr Rowan Fox said the ATO was “focusing on businesses entering the scheme that appear connected to existing manufacturers”. 
“Large liquor sellers cannot control a series of smaller businesses to game the remission scheme’s caps,” she said.
“Our objective is to identify potential risks before they become entrenched and ensure only eligible businesses gain access to these concessions from the outset.”
But an alcohol retail insider said the ATO had been allowing companies to rip off the scheme since it was set up in 2021. 
“I can’t believe this has gone on so long, this was supposed to help small gin distilleries but it has just been rorted,” an industry source said.
This masthead’s reporting had highlighted the rip off along with reports that some discount vodkas contained the ingredients used in paint strippers.
“The market has tanked. We’re getting offered cheap vodka from these distillers three or four times a week but we just won’t touch it,” the insider said.
“If they are selling it for $34.99 a bottle there’s just guilt by association, they must be avoiding the tax.”
Spirits Council of Australia executive 
director Steven Fanner.
Spirits Council of Australia executive director Steven Fanner said his group had been warning the government the scheme was being exploited.
“Tough compliance action is critical but we should not stop at enforcement. We also need to look at the rules themselves to ensure the benefits of the government’s support for distillers are not being diverted elsewhere,” he said.
The Tax Ombudsman has slammed the ATO’s digital services for tax agents, warning outdated systems are driving up compliance costs and administrative burdens.
Julian Bajkowski
ato tax ombudsman watchdog
Image: Adobe Stock

The Australian Taxation Office’s (ATO) official oversight and complaints watchdog has criticised the revenue collection agency’s core digital portal for tax agents, saying it creates an unnecessary “administrative burden” that could increase compliance costs for taxpayers.

In a withering assessment that the ATO has largely copped in the chin, the tax ombud has let rip on the state of ostensibly digital transactions offered to registered tax agents who “represent around 62% of individual taxpayers and 96% of non-individual taxpayers”.

“Online Services for Agents (OSfA) is a secure digital platform provided by the ATO for registered agents and their authorised staff. The proportion of agents who said OSfA met all or most of their needs fell from 76% in 2022 to 63% in 2026,” the Tax Ombudsman office said.

“There are limitations of what agents can complete in OSfA, which creates inefficiencies and frustration, with agents needing to call the ATO to complete a transaction.”

“In some cases, agents must request information from the ATO that already exists digitally, requiring ATO staff to manually prepare reports that could potentially be provided through self-service.”

The ombud also criticised the ATO’s languid pace in pushing through digital fixes for tax agents, pointing to a backlog of orphaned improvement tickets that has accumulated over four years and is now approaching three digits.

“There are almost 100 OSfA-related changes awaiting action in the ATO backlog of system improvements. Some improvements have sat on the list since before 2022 without progressing. Stand-alone improvements to OSfA often struggle to progress in the ATO’s change program prioritisation unless they become part of a larger ATO project,” the tax ombud observed.

Communication fudges also came in for a serve.

“Practice Mail is a web portal designed as a channel for agents to send requests to the ATO, not to support ongoing two-way communication with agents. It no longer meets the needs of agents who require more immediate two-way communications and broader functionality.”

The review observed that where the ATO’s digital services for agents are limited, “agents often need to rely on the registered agent phone line”.

“This is frustrating for agents, while also placing additional pressure on the ATO’s phone services, increasing wait times and delaying issue resolution.”

“We also identified a more systemic issue in the relationship between the ATO and agents, with agents feeling undervalued and their role not respected by the ATO.

“The perceived poor service received by phone and the limitations of the online services were identified as symptoms of that wider relationship issue,” the tax ombud went on, adding that the “ATO has committed to examining opportunities to improve its digital services by identifying content and functionality gaps.”

Digging deeper into the frustrations of tax agents, the review explained that manual, PDF, or paper-based processes have endured.

“Some lodgement processes in OSfA still rely on paper-based or manual workflows rather than fully integrated digital services. Agents can complete requests for refunds of franking credits online for most taxpayers, but requests for non-profit organisations still require agents to complete a PDF form and submit it through Practice Mail for manual processing by the ATO,” the watchdog said.

The issue seems to be one of competing priorities “based on user demand, available funding, system capability, and broader digital priorities,” with the refund “of franking credit requests for non-profit organisations” stuck on paper-based processes “because the ATO does not consider there is sufficient demand to warrant digitisation”.

The ATO cannot digitise everything at once, so it must decide which services to improve. However, demand is not the only factor that matters. The nature and importance of what the form is used for should also be considered,” the tax ombud said.

“Refund of franking credit requests are how eligible non-profit organisations claim a refund they are entitled to receive from the ATO. Some functions are important enough that they should generally be available online, even when they are used by relatively few people. The ability to claim a refund from the ATO is one such function.”

Andrew Leigh, take note.

The ATO copped it sweet.

“The ATO recognises the important role registered agents play in the administration of Australia’s tax and superannuation systems and remains committed to supporting agents through contemporary, secure, and efficient digital services.

“We acknowledge the report’s findings regarding OSfA and the challenges agents can experience when digital services do not fully meet their operational needs,” the ATO said in its response.

“We agree with the report’s recommendations and acknowledge the opportunities identified to enhance self-service capabilities, improve transparency around prioritisation decisions, and strengthen digital engagement channels for agents.”

The Tax Office said it recognised “the importance of ensuring agent needs are appropriately reflected in decisions about future digital service improvements and is committed to strengthening how agent feedback is considered, assessed, and communicated”.

That commitment will no doubt be tested before parliamentary committees.

“The ATO operates in a complex environment and must balance a range of competing priorities, including legislative obligations, security requirements, service delivery commitments, and longer-term transformation initiatives,” Tax responded.

“Within this context, we remain committed to working collaboratively with agents and their representative bodies to identify and deliver improvements that reduce administrative burden, enhance the digital experience, and provide lasting benefits for agents, taxpayers, and the broader tax system.”


Blast from the past 


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