Home » ‘Fraudsters evolving’: 150 ATO officials investigated in TikTok GST fraud scheme

‘Fraudsters evolving’: 150 ATO officials investigated in TikTok GST fraud scheme

At least 150 Australian Taxation Office (ATO) officials have been investigated as part of a GST fraud crackdown, resulting in “employment terminations and criminal proceedings”, according to a new report from Australia’s auditor-general.

The ATO confirmed the figure to auditor-general Grant Hehir in his report into the ATO’s management and oversight of fraud control arrangements for GST.

It singled out Operation Protego — the widely reported multi-agency response to the large-scale escalation of GST refund fraud that resulted in the payment of at least $2 billion in bogus refunds.

The scam first came to the ATO’s attention in December 2021, when the agency began receiving an increasing number of referrals about suspicious income tax and GST refunds.

It involved people acquiring an Australian Business Number (ABN) for a sham business and using MyGov to submit false business activity statements to receive GST refunds.

The scam has been widely reported as the “TikTok GST scandal” because the social media platform, as well as others such as Facebook, allowed it to go viral due to a high number of users promoting it there.

Grant Hehir says the ATO “does not have a procedure to respond to a large-scale fraud event”.(ABC News: Ian Cutmore)

The auditor-general’s report noted that the tax office’s systems to catch GST fraud were in some areas lacking and “not fit for purpose”.

The ATO, it said, had “largely effective” strategies to detect and deal with GST fraud but “does not have a procedure to respond to a large-scale fraud event”.

ATO ran Operation Protego to stop GST fraud, but former officials were involved in scam

The report found Operation Protego itself was launched only after the ATO determined the scale of attempted GST fraud “exceeded the ATO’s business-as-usual capacity to treat”.

In April 2022 the ATO reallocated about 470 staff in GST-related roles to work on Operation Protego and on May 6 2022 issued a public warning to people not to engage in this GST fraud.