The Government issues ban on ESST

From 4 October 2018, the Government has banned taxpayers from using electronic sales suppression tools (ESST) in all activities that relate to their Australian tax obligations. 

The Government has banned businesses and individuals from producing, supplying, possessing, using an ESST, or knowingly assisting others to do so. An ESST can be used to misrepresent or under-report income through: 

  • Falsifying point of sale (POS) records. 

  • Altering transactions to lower the amount of a sale. 

  • Misrepresenting a sales record. 

  • Removing transactions from electronic record-keeping systems. 

To determine if a tool can be considered an ESST, the ATO has outlined that a reasonable individual must consider that one of the principal functions of an ESST is to misrepresent transactions recorded on a POS system. 

Examples of ESSTs include: 

  • A feature or modification, i.e., code or script that forms part of a POS system or software. 

  • Extra software installed into the otherwise-compliant software. 

  • An external device connected to a POS system.