Tax fraud investigation may disrupt Panama papers inquiry

By David Donaldson

Friday May 19, 2017

There are concerns the alleged tax fraud scheme that has seen Australian Tax Office Deputy Commissioner Michael Cranston ordered to appear in court for abuse of office, may damage the ongoing ATO’s Panama papers investigation.

It is “deeply troubling” that charges are to be laid against someone of Cranston’s seniority, said Labor Shadow Assistant Treasurer Andrew Leigh this morning, and emphasises the need for a federal integrity oversight body.

Cranston will be charged next month for allegedly accessing restricted information on ATO systems at the request of his son, one of ten people arrested over the alleged $165 million tax fraud scheme.

A tenth person has been arrested and charged, whom police allege is a former director of the payroll company who continued to manage it during the conspiracy. Simon Anquetil faced Sydney’s Central Local Court this morning.

As the deputy commissioner for taxation, private groups and high wealth individuals, Cranston was involved in the ATO’s investigation of possible tax dodgers among those mentioned in the so-called Panama papers. He was interviewed last year by the ABC about the 800 Australians identified in the trove of leaked records from the offshore law firm Mossack Fonseca.

Four other ATO employees are also under investigation by the tax office for breaches of the Australian Public Service Code of Conduct for allegedly accessing information at the request of Cranston. The people being investigated have been suspended without pay. The ATO declined to confirm reports about the identities of two of those under investigation to The Mandarin.

Expressing concern over the fate of the ATO’s Panama papers investigations, Leigh said it was up to the Tax Commissioner, Chris Jordan, to demonstrate they are “ensuring that they’re doing the work to maintain the integrity of those investigations”

“It’s obviously good that the tax office’s systems flagged this issue up, but it is an incredibly serious challenge. Obviously I don’t want to go into any of the specifics of the individual who’s now been charged, but Labor is concerned that those ongoing investigations continue to take place,” he told ABC interviewer Sabra Lane.

It “reinforces” the need for the Senate investigation into a national integrity commission, said Leigh, “which we’ve been calling for for quite some time now.”

The case is also “a reminder of the importance of transparency,” he added. “Tax transparency is a vital tool here and having the system as transparent as possible is critical for ensuring that big companies pay their fair share.” In this vein, Labor thinks multinational corporations and companies bidding for government contracts should have to declare where they pay tax and how much.

Australia should also look at a whistleblower reward scheme similar to those in place in the United Kingdom and United States, whereby those who provide information that leads to a conviction is able to share a small share of the penalty money. “It does create an internal incentive for the truth to out,” Leigh thinks.

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