ATO chasing 40,000 Aussies over fraudulent GST scheme

Tens of thousands of Aussies are set to be targeted by the ATO over a tax return loophole that’s costing $850 million.

The Australian Taxation Office (ATO) has launched an investigation into a widespread fraudulent GST scheme, believed to be costing the office a whopping $850 million.

Titled “Operation Protego”, the inquiry is cracking down on a suspected 40,000 people who have listed fake businesses in order to claim false GST refunds.

According to Sky News, participants in the scam have claimed an average of $20,000 per refund.

Offenders have been caught creating a fake businesses and registering for an Australian Business Number (ABN), before submitting false activity statements and claiming the refunds.

The ATO have confirmed it is working with banks including the AUSTRAC-led Fintel Alliance and the Reserve Bank of Australia in order to quell the fraud attempts.

ATO Deputy Commissioner and Chief of the Serious Financial Crime Taskforce Will Day warned that information on how to profit from the scam was being circulated online.

“We are working with social media platforms to help remove content promoting this fraud, but if you see something that sounds too good to be true, it probably is,” he said.

Mr Day warned that partakers were not anonymous, and urged those complicit to come forward or face harsher penalties.

“We are urging anyone involved to face the music and come forward now rather than face even tougher consequences later, including penalties and criminal charges,” he said.

“People who have participated in this fraud may have unwittingly followed the advice they have read online, claiming to help access a loan from the ATO, or receive other financial government support such as a disaster payment.

According to Sky News, participants in the scam have claimed an average of $20,000 per refund.

“However, for others, there was nothing accidental or unintentional about setting up a fake business in their own name and seeking an unearned refund.“

“Circumstances, where there were deliberate attempts to defraud the ATO or a refusal to organise repayments, will lead to tougher actions including criminal action.”

Additionally, one of the major points on the ATO’s hit list is cryptocurrency traders.

H & R Block’s Director of Tax Communication Mark Chapman said the government will be looking very closely at Aussies who made a buck in the cryptosphere last year.

“The ATO will also be taking a closer look at the booming market in investments in cryptocurrencies like Bitcoin,” he said.

“Increasing numbers of taxpayers are jumping on the bandwagon and the ATO believes that some of them are failing to declare the profits (and in some cases the losses) they are making on their investments.

“Remember, investing in cryptocurrencies can give rise to capital gains tax on profits. Traders can be taxed on their profits as business income.”

The ATO is coming after up to 40,000 Australians over a GST loophole.