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Millions of dollars
Investment
tax dodge
overseas
uncovered
A special fraud squad of the
Australian Federal Police is
investigating at least two
major commodity dealers in
connection with a multi-mil
lion-dollar tax-avoidance
scheme using the futures mar
kets of London and other
European centres.
A police spokesman confirmed
last night that the squad was look
ing at the non-payment of both
company and personal income tax
over a lengthy period.
"It involved many millions of dollars,
although not nearly as much as the
reported figure of $60 million," he said.
The police are co-operating with the
Taxation Office and the Reserve Bank
to study a large.amount of documents
including, it is understood, computer
data.
The transactions involve normally
taxable income which is transferred
overseas into investment in com
modities at European futures markets,
especially in London.
A futures market is where an investor
sets out to make a profit by buying and
selling commodities, such as gold, sil
ver, wool or meat, for delivery at some
time in the future. The delivery almost
never takes place, because the contract
is sold before the date.
In the scheme under investigation,
the invested funds on the London mar
ket are transferred to a money house in
Hong Kong or one of the other centres
of South-East Asia where no tax is paid.
From there, the Australian owner of
the funds can arrange to have the
money "lent" to himself at a high rate
of interest, say 18 per cent. The purpose
of this is to claim the "loan" as a tax
liability.
The police are looking at the schemes
not only for tax evasion but also
breaches of Australia's tight foreign
exchange regulations. They are concen
trating on the promoters of the scheme
rather than the investors, and are ex
amining ways of recovering much of the
tax evaded.
The Federal Police team of Five of
ficers under a superintendent has been
investigating the scheme for 18 months.
It came to light yesterday after it was
mentioned in the Public Accounts Com
mittee hearing on medifraud in Can
berra.
The committee had queried the
AFP's capabilities to investigate a fraud
involving computers and complicated
transactions. The police said the Taxa
tion Office had praised thfcm for their
skills and expertise in investigating "a
current continuing inquiry".
When questioned after the hearing,
the police revealed the details of the tax
scheme. They would not say when they
expected to lay charges.
MELBOURNE: The Victorian Op
position said yesterday that it had
"credible evidence" that some State
Labor Government appointments might
be involved in "bottom-of-the-harbour"
or other tax-evasion schemes.
The Deputy Leader of the Opposi
tion, Mr Maclellan, said "hundreds of
thousands of dollars" was involved, but
evidence had to be checked, as there
must be certainty that innocent people
were not accused.
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