The ATO’s approach to tax crime

The Commissioner of Taxation annual report 2019-20 looks at how the Australian Taxation Office (ATO) approaches tax crime.

The ATO’s approach includes the implementation of preventative measures, increased education and improved systems to make it easier for people to understand their tax obligations.

The targeting of serious crime that presents the highest risk to Australia’s tax and superannuation systems is also a key priority.

 

ATO responsibility in combating tax crime

The ATO is responsible for protecting the Australian tax and superannuation systems against fraud and related crimes.

It is the lead agency for several taskforces including the Serious Financial Crime, Black Economy and Phoenix taskforces, and is also involved with the Organisation for Economic Co-operation and Development (OECD), the Financial Action Task Force and the Joint Chiefs of Global Tax Enforcement (J5).

Throughout the reporting period, the ATO investigated and prosecuted taxpayers who evaded their tax obligations, with a particular focus on work-related expenses, GST fraud, those participating in the black economy, and illicit tobacco. Its new Tax Integrity Centre facilitates community reporting of suspicious activity to support its work.

 

Key achievements

 

Taskforce results

The ATO leads and participates in a number of taskforces. Significant achievements throughout the reporting period include:

  • The Tax Avoidance Taskforce raised $2.7 billion in tax liabilities and $1.6 billion in cash collections.
  • The Serious Financial Crime Taskforce raised $131 million in liabilities and $59 million in cash collections.
  • The Black Economy program raised $787 million in liabilities and $696 million in cash collections.
  • The Phoenix Taskforce raised $112 million in liabilities and $47 million in cash collections.
  • The Superannuation Guarantee Taskforce raised $111 million in liabilities.
  • The Illicit Tobacco Taskforce seized and destroyed domestic illicit tobacco with a value of $171 million.

 

Stakeholder engagement

The ATO’s domestic and international engagements throughout the reporting period included:

  • Working with the top 1000 public and multinational companies and superannuation funds to ensure they reported the right amount of income tax.
  • Making over 5000 business assistance visits, mainly to small businesses, as part of the black economy program.
  • Conducting education programs with students and migrant communities to ensure they understand tax obligations.
  • Improving systems to better support individual taxpayers, address mistakes in tax returns, and help people to prevent debt.
  • Assisting clients impacted by disasters such as flooding, bushfires and the COVID-19 pandemic.
  • Development of a complex issue and case program which manages matters that don’t fit within standard processes.
  • Connecting to the Financial Crime Intelligence Network, which enables financial crime investigation services from different jurisdictions to work together.

The ATO has also focused on employers who do not comply with super obligations, completing over 17,000 cases and raising over $670 million in liabilities.

 

Information provided to law enforcement agencies

The Taxation Administration Act 1953 allows the disclosure of taxpayer information to specified law enforcement agencies where the information is:

  • Relevant to determining whether a serious offence has been, or is being, committed.
  • For enforcing a law, the contravention of which is a serious offence.
  • For proceeds of crime order proceedings.

5,582 requests were disclosed to requesting agencies throughout the reporting period. Key agencies and taskforces in terms of the number of requests disclosed included:

Agency / Taskforce # Requests Disclosed
Australian Criminal Intelligence Commission (ACIC) 348
Australian Federal Police (AFP) 386
NSW Police Force 432
New South Wales Crime Commission 179
Queensland Police Service 204
South Australia Police 90
Victoria Police 272
Western Australian Police Force 169
Australian Border Force 121
Fraud & Anti-Corruption Centre Taskforce 195
National Anti-Gang Taskforce (comprised of ACIC and AFP) 1328
Phoenix Taskforce 641
Illicit Tobacco Taskforce 131
Serious Financial Crime Taskforce 612
Criminal Assets Confiscation Taskforce (AUSTRAC, ACIC and AFP) 326

 

General categories of offence

Requests for information related to a wide range of offences and legislation. The key categories of offence in terms of the number of requests disclosed throughout the reporting period included:

Category of offence / Legislation # Requests Disclosed
Anti-Money Laundering and Counter Terrorism Financing Act 2006 18
Proceeds of Crime Act 2002 10
Corporations Law 16
Crimes and Criminal Code Acts (Commonwealth) 600
Crimes and Criminal Code Acts (State) 888
Criminal Assets Recovery Act 1990 (NSW) 157
Drug Misuse and Trafficking Acts 280

 

Conclusion

The ATO leads and participates in a number of taskforces which throughout 2019-20 raised billions of dollars in tax liabilities and tax collections. It also supports law enforcement activities through the provision of information to support investigations.

While there is a clear focus on targeting individuals who intentionally avoid their tax obligations, the ATO is also taking a pre-emptive approach through the provision of education, systems and community support to help people better understand and comply with their tax obligations.

Nyman Gibson Miralis provides expert advice and representation in cases involving complex and international tax crime.

Contact us if you require assistance.