Late last month, the Treasury Laws Amendment (Black Economy Taskforce No.1) Bill 2018 secured passage in the Senate, making it illegal to manufacture, distribute, possess, use or sell electronic sales suppression tools (ESSTs).
Taxpayers can now face financial penalties of up to 5,000 penalty units, which currently equates to over $1 million depending on the offence and severity of the crime.
ATO assistant commissioner Matthew Bambrick said the Tax Office would be applying a six-month transitional period until 3 April 2019 for businesses that acquired an ESST on their software before the legislation was first announced on 9 May 2017, allowing them to inform the ATO without any penalty being applied.
“We will be sending letters to businesses who we believe may have an ESST in their POS system to inform them to take action.
“I urge all businesses to keep detailed records of every transaction so you can explain any adjustments or calculations for tax purposes.”
Mr Bambrick said that while it would be working closely with businesses that may have inadvertently purchased software with an ESST function, the new laws would enable the ATO to chase down dodgy businesses.
“These tools serve no purpose other than intentional tax evasion. They can be used to delete, change or falsify electronic point of sales (POS) records and are often referred to as ‘phantomware’ or ‘zappers’,” said Mr Bambrick.
“We know these tools are being used by dodgy businesses, and now that we have legislation passed that specifically sets out sanctions, we can also go after the manufacturers and suppliers.
“Businesses using legitimate POS software shouldn’t be concerned – we can tell the difference between a salesperson correcting an error when ringing up a sale and the deliberate manipulation of sales data.”
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Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.