The Tax Office's investigations into tax fraud are being hampered, and offenders may be getting away because the agency doesn't have access to telecommunications data, unlike similar government agencies like the Australian Securities and Investment Commission.
Subscribe now for unlimited access.
or signup to continue reading
When the mandatory data retention regime was introduced in 2015, the Australian Taxation Office lost its status as an enforcement agency, meaning it couldn't access data like times and dates of phone calls, and location data linking a phone and a person to a certain place at a certain time.
Acting Assistant Commissioner Michael Allsop said telecommunications data is "crucial for timely investigation of frauds being committed against the tax and super systems".
"The ATO has a demonstrated ongoing operational need for [telecommunications data] in order to effectively administer the taxation and superannuation system which are directly related to the protection of public revenue," he said.
Before the introduction of the mandatory data retention scheme the tax office could request the same data from telecommunication companies under old legislation, and the effects of losing the access had made investigations more difficult, sometimes in unforeseen ways.
Using mobile phone data to ascertain a person's location at a certain time is the main barrier faced by the tax office, as well as missing out on identifying co-offenders or ruling out innocent parties.
"The ability to make connections and detect criminal and fraudulent trends, patterns and networks also allows the ATO to much more effectively resist larger scale attempts to defraud the Commonwealth," Mr Allsop said. "It allows the ATO to build a clearer picture of where those threats may come from in the future and enhance our ability to build preventative mitigation strategies."
Illegal tobacco imports, growth and sales have boomed in recent years, but the tax office is on the back foot, with physical surveillance of suspects needed to replace access to phone data, at a cost of more than $10,000 per surveillance shift, with at least four shifts often required to identify suspects often at remote locations.
"In the illicit tobacco context [telecommunications data] assists preliminary operational analysis of devices and locations and, by extension, networks by identifying whether a suspect's mobile phone has been located at a property known to grow illicit tobacco, and subsequent contacts to identify other persons of interest," the submission said.
This week Australian Border Force reported more than 300 tonnes of contraband tobacco had been seized in the past year, an amount that has tripled since 2017.
The Tax Office couldn't say how much revenue had been lost due to losing the ability to access phone data, because they don't keep data to that level of detail.
"It is not possible for us to put a number on how many cases would have proceeded if we had access to the telecommunications metadata," a spokesman said. "We use whatever methods are available to us to continue investigating offences against the taxation and superannuation systems."
President of the NSW Council of Civil Liberties Pauline Wright said the mandatory data retention scheme shouldn't be expanded to include the tax office, as powers under the laws were already too broad and intrusive.
"The tax office has extraordinary powers to investigate, I don't think it justifies the invasion of people's privacy," she said.
Sally Whyte
I report on a range of issues in federal politics and the public service, with a real passion for how decisions made in Canberra affect the lives of Australians.
I report on a range of issues in federal politics and the public service, with a real passion for how decisions made in Canberra affect the lives of Australians.
