The crackdown on businesses suspected of using technology to obscure their tax obligations continues, with the Australian Taxation Office (ATO) confirming raids on 17 premises in the past fortnight.
Electronic sales suppression tools, or ESSTs, are digital tools attached to point-of-sale systems that are designed to falsify payment records.
Businesses using ESSTs can then provide fraudulent tax records to the ATO, skirting their obligations and depriving the broader community of tax proceeds.
It has been illegal to manufacture, sell, promote, or use ESSTs since 2018.
The ATO on Wednesday confirmed a joint action with New South Wales Police resulted in 17 raids spanning three businesses suspected of supplying, or manufacturing, ESSTs in Sydney.
Raids targeted a further eight Sydney businesses suspected of using ESSTs.
New South Wales Police seized a total of nearly $270,000 from two premises, over suspicions of its use in money laundering.
The ATO says the raids also raised questions over $23 million in funds, with recovery action already underway.
As of Wednesday evening, no charges have been laid in relation to the raids.
ATO deputy commissioner Will Day said the latest raids should serve as a reminder to businesses about the risks of intentionally using sales-suppressing technology.
“We want businesses to know that if you’re deliberately using tools or software to evade your taxation obligations, this is illegal, and we are taking the necessary steps to deter this behaviour,” he said.
However, the insidious nature of ESSTs, and their ability to camouflage as genuine POS tools, means some businesses may even be using them unknowingly.
“If you find your point-of-sale system can manipulate records beyond fixing a genuine mistake, you may be using an ESST,” Day said.
“If you are using an ESST, we strongly encourage you to come forward voluntarily rather than have us knocking on your door.”
The recent ATO activity occurred two years after raids on 35 properties across Australia, conducted in conjunction with the Australian Federal Police, and authorities in the UK and US.
The Serious Financial Crimes Taskforce, which incorporates resources from the ATO and AFP, had issued a warning last September about the risks of continuing to use ESSTs.
“It’s illegal and it will not be tolerated here in Australia,” ATO deputy commissioner John Ford said at the time.
“Businesses using or promoting this technology are effectively stealing from the Australian community, and that’s simply not on.”
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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