TikTok GST fraud hit on Tax Office blows out to $4.6b
The Tax Office has admitted paying out more than $1.6 billion in fake GST claims as part of a $4.6 billion fraud based on a simple scheme promoted on social media platform TikTok – a total that is twice previous reports and the biggest tax fraud in Australian history.
The fraud was uncovered by Westpac and other banks, some of which passed on a series of alerts to the Tax Office from 2020. But after being frustrated by the apparent lack of action by the Tax Office, some bank staff shared their concerns informally with the Reserve Bank, which then alerted Treasury and the Tax Office in February last year.
ATO deputy commissioner Will Day.
The Tax Office launched Operation Protego to pursue the fraud on April 11 last year, and the federal police have since conducted a series of raids that have led to more than 100 arrests. There has also been compliance action against 56,000 people. Yet, the ATO has operated largely under the radar.
“We have stopped in the order of $2.7 billion in fraudulent refunds and raised liabilities in the order of $1.9 billion, as at 30 June 2023,” deputy commissioner Will Day, who heads Protego, told The Australian Financial Review.
He said the liabilities included $300 million in penalties and interest.
Accountants in western Sydney, where the fraud went viral in mid-2021, said new examples continued to show up as clients filed their tax returns, which shows that the fraud continues.
From late 2020, banks noticed a wave of suspicious transactions where customers on social benefits had received large business payments – in some cases more than $100,000 – from the Tax Office.
The banks froze the accounts and notified the Tax Office about the transactions, but became increasingly frustrated when
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