How the ATO GST fraud crackdown can impact legitimate refund claims 

The Australian Taxation Office (ATO) has recently launched an investigation into large-scale GST fraud attempts, which is delaying legitimate refund claims and impacting business cashflow. 

The ATO issued a media release, estimating more than $800 million of fraudulent refund claims have been made, with fraudsters relying on the self-assessment process in the BAS lodgement system to claim and be paid for false GST refunds, all before the fraudulent return is picked up by the ATO. 

The investigation includes audits of Business Activity Statement (BAS) returns, highlighting customers who have set up ABN’s without actually operating a business. These customers are then creating and submitting fictitious BAS returns to get a GST refund.  

As part of this increased scrutiny and investigation, the ATO has introduced protocols to closely review all GST refund claims, both legitimate and false, and are putting extra controls in place, such as reviewing bank accounts and requesting further information on specific BAS statement items, to ensure the legitimacy of the claims being made.  

Because of the tightening of controls, we are seeing much more time being taken to resolve those queries, and as a result, the time taken to refund legitimate GST claims is increasing and leading to lengthy delays in payment. For businesses that may rely on the GST refund claim coming in to purchase goods, pay other bills or otherwise be reliant on the cash flow for business purposes, this is understandably causing some concern.  

How to minimise impact on legitimate claims 

In the months where irregular transactions or situations occur, (e.g., a spike in purchases for a particular month) this can cause fluctuations between lodgements from a GST payment to a GST refund position. With the increased ATO scrutiny, this may cause delays in GST refunds and summon questions for the taxpayer to explain. 

Investing in an automated tax compliance solution which contains a series of transaction and verification testing will warn users of anomalies prior to the lodgement of the BAS return. This provides users with the confidence that they are lodging accurate returns and helps to validate the claim with the ATO, ensuring any delay in the payment of the GST refund is proactively minimised. 

Validating ABNs is easy with automation 

With the increasing proliferation of fake businesses and fraudulent ABNs, businesses are obligated to check the ABNs quoted by their suppliers prior to lodgement of the BAS return. There are implications for the business if the ABN quoted is not valid or if the details do not match the supplier. This checking process can be time consuming, especially when there are large volumes of suppliers from month to month. 

An automated solution can help ease this burden by connecting directly to the Australian Business Register in real time, making it simple to check ABN status and GST registrations. The platform can produce a report of any credit claims for a supplier that is not registered for GST and will allow uploads of historical data to ensure all possible credits are being claimed from registered vendors. 

A digitised solution can ease the burden 

As the GST fraud crackdown continues, there is no better time to leverage an indirect tax compliance platform like ONESOURCE from Thomson Reuters, which offers organisations the solutions to tackle the growing burden of GST and other corporate tax charges. 

ONESOURCE technology gives you the control you need to ensure transparency in meeting your ongoing GST compliance obligation by delivering accurate, reliable results. This is not just an indirect tax product that solves all your problems. With ONESOURCE you are teaming up with a business partner that is 100% dedicated to your organization’s success. 

Simmone has been with Thomson Reuters for over 8 years and currently works as a senior solution consultant for indirect tax across Asia and Emerging Markets.  She has over 15 years experience in the tax and accounting industry and her primary focus has been on GST and VAT for the Australia and South East Asia markets. 

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