The Australian Taxation Office (ATO) has coordinated with police to conduct multiple raids on businesses suspected of using and manufacturing electronic sales suppression tools (ESSTs) to avoid tax.

In the last two weeks, the ATO has raided 17 premises associated with three businesses suspected of supplying or manufacturing ESSTs and eight businesses suspected of using the tools in Sydney, NSW. Police also seized cash totalling $269,800 from two properties suspected of money laundering.

The ATO has issued assessments for more than $23 million in relation to the raids, and recovery action has already commenced.

It has been illegal to manufacture, supply, possess, use or promote ESSTs – designed to alter transaction records and avoid paying tax – in Australia since October 2018. A point-of-sale system with such technology may permanently delete transactions, re-sequence transactions, reduce sales values, or misrepresent transactions. 

“Businesses using or promoting this technology are effectively stealing from the Australian community, and that’s simply not on,” said Deputy Commissioner Will Day.

Day said the raids are to ensure fairness and protect businesses who have complied with their obligations. He added business owners should be careful when choosing a point-of-sale to ensure it complies with the law, as it might not be obvious when an ESST is being used. 

According to the ATO, businesses that have used such tools will need to review their past tax returns and activity statements and amend them. They may also wish to discuss next steps with their registered tax professional.

Inside Retail has reached out to the ATO to ascertain the type of businesses that were caught using the illegal POS plugins but has yet to receive a response.