The Australian Taxation Office (ATO) has raided 35 entities across Australia as part of a worldwide effort to crack down on businesses using illegal technology that obscures sales in order to reduce their tax bill.
The ATO, together with officers from the Australian Federal Police, raided dozens of businesses — mostly in the hospitality industry — across Victoria, New South Wales, Queensland, Western Australia and Tasmania last week, though no charges have been laid.
The raids follow an investigation into electronic sales suppression tools (ESST) which allow businesses to either delete or alter transactions or sales values, allowing them to declare a lower bottom line at tax time.
“These dodgy sales suppression tools allow retailers to keep a separate set of books and launder the money in one transaction,” ATO deputy commissioner John Ford explained.
“They conceal and transfer this income anonymously, sometimes offshore.”
For example, Ford says, a customer may order a $60 steak and a $100 bottle of wine, but the ESST software may log it in the system as a $10 bowl of chips and a $4 bottle of soft drink.
“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 stressed.