The Australian Taxation Office (ATO) has revealed it has raided 35 properties nationwide as part of a global crackdown on companies suspected of using technology to under-report sales and avoid paying tax.
Key Points:
- The ATO and AFP officers raided 35 premises suspected of using or supplying technology to evade tax.
- ESST helps companies permanently delete business transactions, reduce sales values, or otherwise misrepresent transactions.
- While the ATO has not said whether anyone has been charged, it says investigations are continuing
According to the ATO, these raids took place in Victoria, New South Wales, Queensland, Western Australia and Tasmania.
The ATO has not revealed what types of businesses were raided, or whether anyone has been charged.
He said his officers raided the properties alongside officers from the Australian Federal Police (AFP).
The investigation has been investigating companies suspected of using or supplying Electronic Sales Suppression Tools (ESST).
ESST helps businesses to permanently delete business transactions, reduce sales values, or otherwise misrepresent transactions.
It then helps companies declare a lower profit for tax purposes.
ATO Commissioner John Ford gave an example of a restaurant that controlled how much customers bought.
“So what might happen is the customer orders a $60 steak and a $100 bottle of wine,” he said.
“And the ESS tool passes it through the point-of-sale system as a $10 bowl of fries and a $4 bottle of soda.”
Ford said it was illegal to do this, as well as supply ESST in Australia.
“[It’s a] deliberate and deceptive act, designed exclusively to under-declare income and avoid tax obligations.
“It is illegal and will not be tolerated here in Australia.
“Companies that use or promote this technology are effectively stealing from the Australian community, and that’s just not on.”
The ATO said in a statement about the raids that “investigations [were] ongoing” and a “significant cache of information [had] has met.”
He also said legal action was expected as a result of the raids.
“We’ve seen ESST appear in hardware connected to the point-of-sale system, cloud-based software, and capability built directly into the software,” Ford said.
The ATO carried out the raids as part of a global task force on ESST.
It was done jointly with counterparts in the United Kingdom and the United States.