ATO spotlights international partnerships at tax crime summit

Last week (10-12 November), the ATO hosted the Global Financial Institutions Partnership (GFIP) summit, an event seeking to strengthen international partnerships against tax evasion, financial crime and money laundering.

ATO deputy commissioner John Ford underscored the importance of international partnerships in addressing financial crime and strengthening the tax system.

“The ATO, along with our partner agencies, are combating tax evasion and will hold anyone giving themselves an unfair advantage to account,” Ford said.

“The sharing of capabilities between government agencies and private sector groups puts us in the best possible position in detecting these behaviours early and acting swiftly.”

The summit was an initiative of the Joint Chiefs of Global Tax Enforcement (J5), a partnership between tax authorities in Australia, Canada, the Netherlands, the UK and the US seeking to strengthen global financial crime detection and prevention.

Representatives from international revenue agencies, financial institutions and law enforcement were in attendance. The summit focused on how banks, fintech companies, regulators and law enforcement could work together to close compliance gaps.

Participants discussed the evolving threat environment, including how geopolitical shifts, AI and emerging financial technologies were reshaping the tax crime landscape.

The summit also delved into how complex networks of service providers and opaque relationships could be used to hide financial flows and make it harder to detect illicit activity.

Sessions covered issues including identity crime, cyber threats and the cash compensation model, where businesses use cash from criminal sources to pay employees or cover expenses.

While tax evasion was a global issue, the ATO urged community members to come forward to their confidential tip-off line if they saw evidence of tax crime in their local community.

Since July 2019, the Tax Office has received over 300,000 community tip-offs, mostly related to shadow economy activity, including demands for cash payment or incorrectly claimed business expenses.

The ATO said that tip-offs levelled the playing field and prevented law-abiding businesses from being disadvantaged due to their honesty. Tax evasion could bring on significant penalties and possible criminal sanctions, it cautioned.

“People evading their tax and super obligations are directly harming honest businesses and putting an increased burden on other Australians. There really is no excuse,” ATO assistant commissioner Tony Goding said.

“It’s unfair competition and it’s illegal. And when you’re caught, you don’t just have to cough up the tax. You’ll also face significant penalties plus interest on unpaid taxes and possibly even criminal sanctions.”