The Australian Taxation Office (ATO) is cracking down on the biggest GST fraud in Australia’s history through Operation Protego, with significant recent enforcement activity.
In this article we will explore how the GST fraud is being perpetrated and what is being done by the ATO to stop these crimes.
The GST fraud investigated by Operation Protego
Operation Protego, which has been conducted by the ATO-led Serious Financial Crime Taskforce, has been investigating a major GST fraud across Australia which was first detected in early 2022.
The fraud was originally promoted on social media channels but spread to enablers offering to help individuals to invent fake businesses in order to claim GST refunds that they weren’t entitled to.
The taxpayers involved allegedly created fake businesses to obtain an ABN, which was then used to submit a fictitious business activity statement (BAS) to claim a fabricated GST refund.
The ATO has said, “Simply speaking, if you don’t operate a business, you don’t need an ABN and you shouldn’t lodge a BAS. This is fraud”.
Recent Operation Protego activity
In February 2023, the Serious Financial Crime Taskforce undertook enforcement activity across Australia, including the execution of search warrants against 10 individuals suspected of promoting the GST fraud including on social media.
Letters have been sent to over 20,000 individuals who are implicated in the fraud, warning them of the grave consequences that await them unless they step forward and return the funds they have unlawfully obtained.
Key outcomes resulting from Operation Protego to date include:
- 87 arrests across Australia.
- Two individuals sentenced to jail time for their crimes following their arrest in 2022.
- Compliance action taken on more than 53,000 clients.
- Approximately $2.5 billion in fraudulent GST refunds prevented from being paid to individuals seeking to defraud the system.
“These actions send a strong message to people promoting this scheme that the ATO will find you, and there will be serious consequences”, ATO Deputy Commissioner and Chief of the Serious Financial Crime Taskforce John Ford said.
Key takeaways
The ATO has achieved significant results in combatting the biggest GST fraud in Australia’s history through Operation Protego. A strong message has been sent to those promoting such schemes that they will be found, and there will be serious consequences.
