Tax dodging gets riskier

Police and revenue officials launched a high profile swoop on suspected tax dodgers yesterday in three countries, Australia, New Zealand and Vanuatu .

But that spectacular operation, which has already led to one arrest, is just one part of a broadly co-ordinated, high tech attack on revenue fraud, that is now rolling in Australia.

The government described the man, who has been arrested, as a scheme promoter, based in Western Australia, where many people, on high incomes, believe they are paying too much tax.

But paying the right amount of tax is still important.  And a statement issued jointly, by no less than eight Federal ministers, warned that several other people, caught up in the swoop,  will be summonsed to appear in court “shortly.”

They said search warrants had been executed in all three countries.

“The Australian Taxation Office is also conducting 80 audits examining allegedly false deductions exceeding $80 million,” the eight ministers, led by Treasurer Wayne Swan, said in their statement.

“People who avoid tax through the use of abusive tax haven schemes place an unfair burden on the vast majority of the Australian community who do the right thing,” they added.

The swoop was part of Project Wickenby, the ATO’s attack vehicle, which has its guns trained squarely on rich tax dodgers.

But, if you think that the taxman isn’t interested in any little schemes, practiced by those on less spectacular incomes, you would be wrong.

Indeed a new report, published by the Australian Audit, applauds the Tax Office for the developments it is pursuing, in high tech data matching operations.

It suggests that any-one indulging in a little tax fiddling would be wise to review their operations, immediately.

The report reveals that Tax Office now has new – and very powerful – weapons to detect tax fraud.

“Although traditional semi-automated data matching has been a feature of tax administration since the 1970s, the Tax Office has only recently developed … more comprehensive data matching and analytics capability,” the Auditor General said.

The AG’s report says this has given the tax man “scope to more efficiently and more quickly identify a range of compliance risks.”

That’s a clear warning.