ATO to receive $187 million to combat tax and superannuation fraud

The Australian Taxation Office (ATO) has been given $187 million in new funding to bolster its defences against tax and superannuation fraud, including tools to block suspicious activity in real-time and a taskforce to recover lost revenue and step in when scammers try to claim fake refunds. 

The new funding, to be provided over four years, is part of a broader suite of measures in the 2024-25 federal budget to strengthen tax compliance.

The $187 million includes three key components:

• $78.7 million for the ATO to upgrade its technology so it can detect and block scammers in real time;
• $83.5 million for a new compliance taskforce to claw back lost revenue and intervene when fraudsters attempt to obtain false refunds; and
• $24.8 million to improve how the ATO manages its counter-fraud activities and helps those affected by fraud. 

Change to BAS refund notifications

The ability of the ATO to manage “peak fraud events” like the massive GST fraud scam that led to Operation Protego has also been strengthened in this year’s budget. 

The $4.6 billion scam involved thousands of individuals attempting to claim false GST refunds and was reportedly driven by social media, especially TikTok. 

Currently, if the ATO intends to retain a business activity statement (BAS) refund for further investigation, it must notify a taxpayer within 14 days. 

The government plans to extend this mandatory notification period to 30 days, in line with mandatory notification periods for non-BAS refunds. 

The government says legitimate refunds will be largely unaffected by the change, but the extra time will allow the tax office to better combat large-scale fraud events. 

Legitimate BAS refunds that are retained for longer than 14 days will continue to attract interest, payable to the taxpayer, and the ATO will be required to publish BAS processing times online. 

The change will require enabling legislation, and as such, it will come into effect from the start of the first financial year after that legislation receives Royal Assent. 

Tax avoidance, shadow economy taskforces to continue

The ATO already operates specialised taskforces and compliance programs to combat tax avoidance and the shadow economy, and these will be funded for another two years, from July 2026. 

The continuation of the Shadow Economy Compliance Program will “enable the ATO to continue to reduce shadow economy activity, thereby protecting revenue and preventing non-compliant businesses from undercutting competition”, according to the budget papers. 

The government expects this to result in an increase in receipts to the budget of $1.9 billion, while payments are forecast to increase by $610.2 million over the coming five years. 

Maintaining the Tax Avoidance Taskforce will mean the ATO will continue to be “well-resourced to pursue key tax avoidance risks, with a focus on multinationals, large public and private businesses, and high-wealth individuals”, according to the budget papers. 

Meanwhile, the government also intends to extend the Personal Income Tax Compliance Program for another 12 months, from July 2027, to combat “overclaiming of deductions, incorrect reporting of income and inappropriate tax agent influence”. 

“This will enable the ATO to continue its focus on emerging risks to the tax system, such as deductions relating to short-term rental properties,” the budget papers state. 

To see SmartCompany‘s full budget coverage, click here.

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