Lawyers and tax advisers are being paid to fight tax fraud and other tax crimes in Australia, but the sector is rife with loopholes and a lack of accountability, according to a new report.
The Next New Zealand report, “Tax Fraud is Everywhere”, is the latest in a series of reports released by the Australian Taxation Office (ATO).
The latest report, released on Thursday, shows that almost half of all criminal cases in New Zealand were linked to a single, anonymous source.
More than 70 per cent of cases in Australia were linked through the “tampering with or disclosure of information” category.
A separate report, titled “The Most Valuable Resource: Fraud and Taxation in Australia”, has found that there are about 10 per cent more instances of tax fraud per 100,000 people in New York, which is about five times as many as in Australia.
The ATO’s report also found that Australia had more tax fraud victims than any other OECD country.
“The sheer volume of tax cases in the country makes it a great place to conduct investigations, investigate individuals, and prosecute individuals,” said ATO acting director of investigations Peter Worsley.
“We see that the people who are making the cases are often the ones who have to bear the brunt of the investigations and prosecutions.”
Mr Worsry said the ATO was particularly focused on criminal activity because the fraudsters could potentially benefit from tax breaks, such as the “double taxation” scheme, which allows businesses to avoid paying income tax on money earned overseas.
Tax fraud was also common in other countries, such in the United States, New Zealand and Ireland.
“There is a huge market for fraud,” Mr Worry said.
The ATG’s report comes after the ATOs own anti-fraud unit was disbanded in 2016 amid a $1.8 billion fraud investigation into the sale of a property in Victoria. “
Tax fraud is an international problem, so it is very lucrative for criminals to conduct this type of fraud.”
The ATG’s report comes after the ATOs own anti-fraud unit was disbanded in 2016 amid a $1.8 billion fraud investigation into the sale of a property in Victoria.
At the time, Mr Wory said the fraud unit had made a major error in not tracking down the real source of the fraudulent payments, the sale.
The investigation uncovered a $4 million bribe to secure a contract to build a new bridge in New South Wales.
The report found that fraudsters in Australia often use a range of techniques to defraud victims of money.
“They will often use false names, often pretending to be someone else,” Mr Williams said.
One example was when a person claimed to be a real estate agent and asked for a $200,000 tax credit on a property sale, Mr Williams added.
“In this instance, the fraudster then went on to claim a $400,000 credit.”
The fraudsters often use the same tactic when they are trying to get people to sign up for tax-free savings accounts, which the ATG says is the most common fraud tactic used by people to make money.
The fraudster would also ask people to pay for products or services they did not want to pay.
Mr Williams says the fraud can be particularly effective when it involves “people who have no real need for money”, or people who have already made payments on a business.
Mr Woriess experience in the fraud sector also led him to recommend “investigating the real person who is involved”.
He said the best way to ensure a victim was not duped was to contact the person directly.
“This can be done by calling the person in person and asking them what they think is the best thing to do with the money,” Mr Dickson said.