Businesses that use software to delete or modify sales records to avoid paying tax face huge fines under a new ban.
Merchants face fines of up to $1 million if they use the tools known as electronic sales suppression software in their point-of-sale systems.
"These tools serve no purpose other than intentional tax evasion," assistant tax commissioner Mathew Bambrick said on Thursday.
"They can be used to delete, change or falsify electronic point of sales records and are often referred to as 'phantomware' or 'zappers'."
It is now illegal to manufacture, distribute, possess, use or sell electronic sales suppression tools.
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Businesses installing an electronic sales suppression tool before the legislation was first announced on May 9 last year have six months to let the tax office know and they won't get penalised.
"We will be sending letters to businesses who we believe may have an ESST in their POS system to inform them to take action," Mr Bambrick said.
"Businesses using legitimate POS software shouldn't be concerned - we can tell the difference between a salesperson correcting an error when ringing up a sale and the deliberate manipulation of sales data."
The Australian Tax Office looked at one business using the tools and found it was falsely reporting losses and not managing employee obligations.
The audit found extra income of $2.73 million, meaning the business owed $354,000 in GST and $1.5 million in penalties for deliberately manipulating tax records.
