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Major ATO crackdown: ‘Will not be tolerated’

An ATO official holding papers by the boot of a car and Australian currency.
The ATO has participated in a global crackdown on tax avoidance technology. (Source: ATO/Getty)

The Australian Taxation Office (ATO) has taken part in a major global operation with the United States and United Kingdom to crack down on businesses suspected of supplying software to avoid paying tax.

Operation Flutter was a coordinated global crackdown by the Joint Chiefs of Global Tax Enforcement (J5) on those supplying and using illegal electronic sales suppression tools (ESST).

The raids in Australia were undertaken by the ATO and supported by the Australian Federal Police (AFP) in Victoria, New South Wales, Queensland, Western Australia, and Tasmania.

Officers conducted raids at 35 separate premises suspected of supplying and using ESST.

Speaking at a meeting of the J5 Chiefs, ATO deputy commissioner and J5 chief John Ford said the dodgy sales suppression tools allow retailers to launder money.

“They conceal and transfer this income anonymously, sometimes offshore,” Ford said.

“So what might happen is that the customer orders a $60 steak and a $100 bottle of wine and the ESS tool then puts it through the point-of-sale system as a $10 bowl of chips and a $4 bottle of soft drink.”

It has been illegal to produce, supply, possess, use or promote ESS tools or software in Australia since October 2018.

“Adding ESST to your point-of-sale system is a deliberate and underhanded act designed purely to under-report income and avoid tax obligations,” Ford said.

“It’s illegal and it will not be tolerated here in Australia. Businesses using or promoting this technology are effectively stealing from the Australian community, and that’s simply not on.”

The ATO encouraged businesses using ESST to come forward voluntarily rather than hope they won’t be discovered by ATO investigators.

The ATO said businesses that come forward voluntarily may be provided with an opportunity to receive a reduction in penalties.

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