ATO secrecy review expanded to cover TikTok fraud

afr.com:

A Treasury review into secrecy laws that bind the Tax Office will consider the fallout from a $1.6 billion tax fraud scheme executed via TikTok, as federal Labor promises enhanced rules to protect taxpayers.

Assistant Treasurer Stephen Jones said the government was deeply concerned at revelations the fake GST claims scheme went viral on the social media platform, reaching a monetary total that is twice previous reports and represents the biggest tax fraud in Australian history.

TikTok says it co-operated with the Tax Office to permanently ban more than 60 accounts that promoted GST fraud. 

The fraud was uncovered by the banks, which froze accounts and alerted the Tax Office. The ATO said strict taxpayer secrecy laws limited what it could share about its investigation into the fraud, which was ongoing from 2020.

“We’re also going to have a broader look at the tax secrecy laws,” Mr Jones told The Australian Financial Review late on Monday.

“They’re important, but we want to ensure that they’re not being used as a shield against the Commonwealth tracking down and responding to fraud in a legitimate way, like any organisation would want to protect itself.”

TikTok said it had permanently banned more than 60 accounts and removed hundreds of videos which triggered the fraud and the illegitimate payouts.

In one of the TikTok videos last year by social influencers who promoted the scam, viewers were told, “Everyone else got refunds, it’s OK, it’s just a temporary loan [from the government].”

At least 56,000 people participated in the scam, which involves individuals obtaining an Australian Business Number, then using their MyGov account to file fraudulent business activity statements to claim GST refunds which in some cases