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System changes made off the back off the GST refund fraud scheme may result in a more difficult GST registration process, says Chris Jordan.
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GST fraud to see ‘grittier, slower’ GST registrations, ATO Commissioner warns
22 February 2024
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The Tax Office has seen a steady rise in fraud and debt post-Covid and is continuing to “harden its systems” to protect against rising scams and threats, ATO Commissioner Chris Jordan has said in a recent address.
In his speech at the National Press Club, Mr Jordan said while increasing safeguards and resetting the ATO’s debt collection approach were not popular decisions, he was “unapologetic” about the ATO’s focus.
“When you pay GST to a store or see the tax taken on your payslip, you rightfully expect this has been paid on to the ATO. Likewise, you expect your super has been paid to your super fund,” said Mr Jordan.
“Some businesses are telling us that they’ve collected GST and withheld tax from your wages and promised to pay super but they haven’t paid it on. We cannot allow that to stand, especially super for their employees.
“I think you and the community would agree that we cannot allow people to live off money that’s not theirs.”
Mr Jordan said that recent fraud attempts including the $2 billion in fraudulent GST refunds uncovered under Operation Protego had forced the ATO to “tighten its systems”, which may see slower GST registrations.
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Mr Jordan said the ATO’s systems had not been designed for taxpayers to commit fraud at such scale, in such a short period and in their own names.
“We never really thought that 57,000 people would commit fraud in their own name and address. It’s bizarre. It really shocked us that the community could have such an appetite to commit fraud and take money from the government in that way,” said Mr Jordan.
While the ATO aims to make things as simple as possible for small business to be able to register for an ABN or register for GST, the response to the GST fraud scheme will have negative implications for those processes, he said.
“Unfortunately, this has resulted in more grittiness having to be put into the system. It will be slower and potentially more difficult for people to be able to get a GST registration in particular,” he warned.
Mr Jordan said while there is unlikely to be another scam like the one uncovered by Operation Protego due to the ATO’s tighter systems, he expects tax fraud attempts will only worsen into the future.
“What concerns me now is the industrialisation of identity theft through large scale cyber breaches,” he stated.
“We’ve recently had a situation where 30,000 new super funds were created in a very short period of time using information on the dark web, received from the big data breaches."
In this particular case, cybercriminals used bots to automate the process of filling out the forms to set up the funds, according to the ATO.
“The criminals couldn’t fill out the forms quick enough so they devised a bot to do that. This is scary stuff,” said Mr Jordan.
“We really need to keep on top of this, we really need to keep investing, we need to keep convincing government that this is something where continuous funding will be required.”
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