ATO to Receive $187 Million Funding Boost to Tackle Superannuation and Tax Scams
The Australian Government has earmarked an additional $187 million for the Australian Taxation Office (ATO) in the 2024-25 federal budget. This substantial infusion of funds is aimed at upgrading technology, enhancing compliance measures, and improving counter-fraud activities to protect the integrity of Australia’s tax and superannuation systems.
Upgraded Technology and New Compliance Taskforce
The allocated funding comprises three principal components designed to significantly enhance the ATO’s capability to tackle fraudulent activities. A notable $78.7 million will be dedicated to modernising the ATO’s technological infrastructure, enabling the detection and blockade of scam activities in real-time. This move is expected to provide a robust defence mechanism against increasingly sophisticated fraud attempts.
Furthermore, an allocation of $83.5 million will go towards establishing a new compliance task force tasked with recovering lost revenue and intervening in instances of fraudulent refund claims. This taskforce represents a proactive step towards preemptively identifying and addressing fraud.
An additional $24.8 million will be invested in refining how the ATO manages its counter-fraud activities, with a focus on supporting individuals affected by fraud. This holistic approach underscores the government’s commitment to not only combating fraud but also providing assistance to victims.
Strengthened Measures Against Peak Fraud Events
In response to significant “peak fraud events,” such as the massive GST-fraud scam unveiled by Operation Protego, the government is taking decisive action. The scam, largely proliferated through social media platforms like TikTok, involved thousands of fraudulent GST refund claims, highlighting vulnerabilities in the current system.
To this end, changes will be made to the notification period for retaining business activity statement (BAS) refunds. Currently set at 14 days, the period will be extended to 30 days to align with non-BAS refunds. This extension aims to give the ATO sufficient time to thoroughly investigate potential fraud cases without impeding legitimate refund claims. Importantly, taxpayers whose legitimate BAS refunds are delayed beyond 14 days will still accrue interest, ensuring fairness in the process.
Ongoing Efforts to Combat Tax Avoidance and Shadow Economy
The ATO’s efforts to combat tax avoidance and the shadow economy receive further backing with the continuation of specialised task forces and compliance programs. These initiatives, funded for an additional two years from July 2026, are critical in clamping down on non-compliant activities that undermine fair competition and erode public revenue.
The Shadow Economy Compliance Program is particularly vital in curtailing activities that facilitate tax evasion, ultimately safeguarding revenue and ensuring a level playing field for all businesses. Similarly, the Tax Avoidance Taskforce plays a crucial role in addressing tax avoidance schemes, focusing on multinationals, large corporations, and high-wealth individuals.
Additionally, the government plans to extend the Personal Income Tax Compliance Program for another year until July 2027. This extension underscores the government’s determination to address emerging risks, such as incorrect income reporting and overclaiming of deductions, including those related to short-term rental properties.
