ATO issues $23m in assessments after latest ESST raids
The Tax Office has conducted raids on 17 premises in the past two weeks as part of its continued crackdown on electronic sales suppression tools.
The ATO recently undertook further raids on businesses suspected of using, manufacturing or supplying electronic sales suppression tools (ESSTs) to avoid paying tax.
Over the last two weeks, ATO officers led raids on 17 premises associated with 3 businesses suspected of supplying or manufacturing ESSTs and eight businesses suspected of using ESSTs in Sydney, NSW.
Officers uncovered evidence of distribution and use of illegal ESSTs, as well as a significant amount of electronic and business records.
The raids were assisted by New South Wales Police who seized, as proceeds of crime, cash from two properties totalling $269,800 suspected as money laundering.
The ATO has issued assessments for more than $23 million in relation to the raids, and recovery action has already commenced.
The raids follow previous warnings about engaging with ESSTs from the ATO-led Serious Financial Crime Taskforce (SFCT).
The ATO reported in October last year that it had raised $40 million in liabilities from previous raids relating to the suspected use and distribution of ESSTs.
The Tax Office said a point-of-sale system with an illegal ESST enabled may permanently delete transactions, re-sequence transactions, reduce sales values, or misrepresent transactions.
“No matter how a particular ESST works, it produces fake records and are used to under report taxable income,” the regulator said.
ATO deputy Will Day said the recent activity demonstrates the ATO will take strong action against businesses who deliberately engage with illegal ESSTs.
“We want businesses to know that if you’re deliberately using tools or software to evade your taxation obligations, this is illegal, and we are taking the necessary steps to deter this behaviour,” said Mr Day.
“Businesses using or promoting this technology are effectively stealing from the Australian community, and that’s simply not on,” Day said.
The ATO’s compliance activity in this area ensures a level playing field and protects the vast majority of businesses who do the right thing and meet their tax and superannuation obligations, he said.
He warned business owners to exercise reasonable care when choosing a point-of-sale and other business systems to ensure they comply with the law.
“It might not be obvious when an ESST is being used. If you find your point-of-sale system can manipulate records beyond fixing a genuine mistake, you may be using an ESST,” he said.
“If you are using an ESST, we strongly encourage you to come forward voluntarily rather than have us knocking on your door.”
The ATO said that businesses that have used ESSTs will need to review their past tax returns and activity statements and amend them.
“They may also wish to discuss next steps with their registered tax professional,” the ATO said.
