Did you think you could outsmart the Australian Tax Office?
The Australian Tax Office (ATO) raided 35 Australian businesses in 2022 suspected of using electronic sales suppression tools (ESSTs) to delete business transactions, reduce sales amounts and falsely and purposely under-report income to the ATO and avoid paying tax.
Businesses must keep and retain accurate records to meet their tax, super and employer obligations. While most businesses follow the law, some are deliberately under-reporting their income using ESSTs.
ESSTs are implemented as:
- hardware connected to the point of sale (POS) system
- cloud-based software
- inbuilt software programs.
ESSTs are used to:
- permanently delete transactions
- re-sequence transactions
- reduce sales values
- misrepresent transactions, and consequently, produce fake records.
Legislation was passed on 3 October 2018 making it illegal to produce, supply, possess, use, or promote the use of ESSTs in Australia. Whilst you may think you are outsmarting the ATO, deliberately under-reporting your income is a criminal offence and at some point, you will be caught and subjected to significant penalties and prosecution.