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The ATO has published a new taxpayer alert, ‘TA 2025/2: Arrangements designed to improperly obtain goods and services tax refunds’, to warn businesses against using arrangements to collude with another related business to create fraudulent invoices, so they could attempt to claim large GST refunds.
According to the Tax Office, tax professionals should be aware that these fraudulent claims were increasing, and as previously reported by Accountants Daily, were predominantly within the property and construction industry.
“We’ve also identified early signs of it proliferating in other industries, particularly by privately owned and wealthy groups,” the ATO said.
It was noted that this surge in GST refund fraud cases was not related to or captured by Operation Protego, where individuals created fake businesses and lodged fake BAS statements to gain GST refunds.
Based on the surge of the arrangements, they were seen to vary in the features they included; however, many were noted to feature:
· False invoicing between related parties, such as inflated invoices or issued invoices where no goods or services were provided.
· Deliberate misaligned GST accounting methods across a group to contrive a GST refund.
· Duplication of GST credit claims in related entities for a single high-value transaction.
· Claimed GST credits for alleged purchases, development, and construction that never occurred.
· The use of straw directors to try and hide the true relationship between related parties.
“We regularly intercept and stop suspicious claims before a refund is issued. Those involved are exploiting the system and gaining an unfair advantage over honest businesses. You can help us put a stop to these arrangements by coming forward if you see them,” the ATO said.
In addition to this, a Four Corners investigation by the ABC recently revealed that tens of thousands of individuals, almost 57,000, had lodged false GST refund claims amounting up to $2 billion.
Western Australian senator Fatima Payman said the federal government needed to urgently recover the $2 billion in fraudulently claimed GST refunds and prosecute the 57,000 individuals identified as having defrauded the system.
“The scale of this fraud is staggering, and yet the government appears to just let these crimes go unpunished while ordinary taxpayers foot the bill,” she said.
“Australians, and especially Western Australians who contribute significantly to GST revenue, deserve to know why these fraudsters are walking free.”
Payman said to mitigate this, the government should immediately launch a targeted recovery operation, refer all viable cases to the Commonwealth Director of Public Prosecutions, commission an independent review and report quarterly to parliament.
Payman urged the government to act now and to act quickly, as it was “a betrayal of public trust”.
“This is not a victimless crime, this is money that could have gone to hospitals, schools, aged care, and essential infrastructure,” she said.
“I’ll be using every parliamentary tool available to ensure this government doesn’t sweep this under the rug.”
Imogen Wilson
30 July 2025
accountantsdaily.com.au
25th-August-2025 | 
