CRA launches raids in Canada to crack down on ‘carousel’ tax-fraud scheme

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The Canadian government has potentially lost millions of dollars in an elaborate “carousel scheme” that is based on fraudulent sales tax refunds, according to a government source.

To make money off of the scheme, fraudsters create shell companies, false commercial transactions and a lengthy paper trail in a bid to convince government agencies that they are eligible for large sales tax refunds. Fraudsters allegedly create false transactions to obtain GST or HST refunds for fake transfers of goods and services.

The Canada Revenue Agency has identified more than $50-million in allegedly fraudulent requests for sales tax refunds, a government official said. It’s unknown exactly how much money was lost as part of this alleged fraud.

The CRA is expected to make public more details on its investigation after the raids are completed.

Read more at The Globe and Mail

This article is summarized by Canadian Fraud News Inc.