NO.004

GOVERNMENT PROVIDES EXTRA FUNDS TO COMBAT TAX SCAMS

The Treasurer today announced that the Government would provide an additional $305 million over the next 6 years to further resource a multi-agency operation directed at promoters of and participants in off-shore tax schemes and fraud.

Under the label of Operation Wickenby, the Tax Office, the Australian Crime Commission, the Australian Federal Police, the Australian Securities and Investments Commission and the Commonwealth Director of Public Prosecutions have been working closely together over the past 6 months to get to the bottom of these arrangements. The arrangements are alleged to involve falsification of tax deductions or hiding, and not declaring income.

The detail of these arrangements came to light through Australian Crime Commission action, after a referral by the Tax Office of information obtained in a tax audit. Participants and promoters who are shown to be involved in this sort of conduct can expect the full force of the laws of the Commonwealth to be applied to them.

This may involve action under civil, tax or criminal laws, for example: tax avoidance under the Income Tax Assessment Act 1936; false and misleading statements under the Taxation Administration Act 1953; defrauding the Commonwealth under the Crimes Act 1914; obtaining a financial advantage by deception under the Criminal Code 1995; confiscation of criminal assets under the Proceeds of Crimes Act 2002.

The Treasurer noted the close involvement of the Attorney-General and the Minister for Customs and Justice in ensuring a comprehensive whole of Government response.

This is the latest initiative of the Government to ensure the integrity of Australia’s revenue system. Other recent initiatives have included:

• an increased focus on business compliance and field services ($173 million allocated over 4 years from 2002-03);
• a range of taxation and superannuation compliance activities including a focus on employer obligations, capital gains, rental reductions, tax agents and superannuation guarantee ($326 million allocated over 4 years from 2004-05);
• additional revenue compliance activities on import duties and goods and services tax assessments ($28 million allocated over 4 years from 2005-06);
• hosting of the OECD sponsored 2005 Global Forum on Taxation, the principal forum for progressing efforts toward effective exchange of information between countries on criminal and civil tax matters; and
• commencement of a comprehensive programme of negotiations with tax havens to enter into bilateral Tax Information Exchange Agreements. Australia signed its first such agreement, with Bermuda, in November 2005.

CANBERRA

8 February 2006