Date posted: 15/08/2023

Operation Protego (GST fraud) – Ethical considerations

CAs who become aware of a person’s involvement in fraudulent activity are reminded of relevant ethical rules applying to accountants.

CA ANZ Tax News has previously highlighted the ATO’s action against GST fraud under Operation Protego. This operation involved - targeting fraudulent claims for GST refunds flowing from (step 1) successful applications for ABNs, then (step 2) lodgement of activity statements falsely claiming input tax credits, with these transactions occurring via ATO online services.

This fraud was revealed in an ATO warning statement in May 2022 which said “…sophisticated risk models deployed by the ATO, coupled with intelligence received from banks including through the AUSTRAC-led Fintel Alliance and the Reserve Bank of Australia, [has] identified a recent spike in suspicious refunds”.

Promotion of the scheme occurred predominantly via social media. Some participants were apparently under the impression that the scheme offered a legitimate way to obtain government benefits.

Nonetheless, CAs who become aware of a person’s involvement in fraudulent activity are reminded of relevant ethical rules, including:

The ATO also offers a confidential online mechanism for reporting suspicious behaviour. Legal protections are afforded to tax whistleblowers.

Readers should also note that the ATO latest statement – Correcting the record on Operation Protego – notes that it “…expects that any tax or BAS agent that becomes aware of a client that has participated in fraud to notify the ATO immediately”.