Financial crime investigators have raided 10 people suspected of promoting GST fraud across three states.
Operation Protego, a major operation begun last year by the tax office-led serious financial crimes task force, is focused on offenders inventing fake businesses and lodging false Australian business number applications.
They then attempt to submit fictitious business activity statements to gain a dishonest GST refund.
At December 31, the ATO had taken compliance action on more than 53,000 clients and stopped about $2.5 billion in fraudulent GST refunds from being paid to individuals seeking to defraud the system.
So far, two people have been sentenced to jail for their crimes.
More charges are expected to be laid over coming months.
Assistant Treasurer Stephen Jones said the operation would send a strong signal that tax fraud will not be tolerated.
"This is not accidental over-claiming - it's alleged these offenders took deliberate steps to engage in tax crime and encouraged others to do the same," Mr Jones said.
"This defrauds the Australian community of money that could otherwise be invested in community services that Australians rely on.
"Tax crime is not victimless. It takes money out of the hip pockets of all Australians."
Task force chief John Ford said a number of the offenders used social media to recruit people into the scheme.
"For people getting involved or already involved, the message is engage with the ATO before we take firm action," Mr Ford said.
The ATO is writing to more than 20,000 people involved in the fraud, warning them of serious consequences unless they come forward and repay the money they have defrauded.
"You need to check the facts - nobody is giving money away for free or offering loans that don't need to be paid back. Simply speaking, if you don't operate a business, you don't need an ABN, and you shouldn't lodge a BAS. This is fraud," Mr Ford said.
