The Australian Taxation Office (ATO) appear to no longer accept payments from Coles Mastercard, Vanilla Mastercard and Vanilla Visa gift cards, potentially spelling the end of a popular hack that allowed Australians to save money and earn points when paying taxes.
What’s changed
As part of a recent upgrade to their card payment system, the ATO now require you to enter a billing address and phone number or email that can be matched against those held by your financial institution.
If necessary, your payment may also be verified by a one-time-pin or some other form of authorisation (e.g. approving the transaction in your bank’s mobile app).
The ATO say that these new changes, which affect both the MyGov and Government EasyPay websites, were implemented to help stop fraudulent card use:
This is a security measure that ensures safer payment transactions. It helps to verify that you are the authorised card holder, and stolen or compromised card details are not being used.
The details you enter should match what is on record with your card issuer, and may be different to the details held by the ATO.
If you’re paying with your own credit or debit card this should not be a problem. With a prepaid Visa or Mastercard gift card, however, there is usually nothing tying your identity to the card issuer so you’re unable to provide the required information or verify your activity.
Why people use gift cards to pay tax
An increasingly popular hack in recent years has been to buy selected prepaid Visa or Mastercard gift cards during a promotion and then use them to pay the ATO.
This is sometimes known as the “OzBargain way” of paying tax, owing to the fact that the practice was popularised by users of the deal sharing website.
If it was a discount on the gift cards then you would essentially receive a discount your tax. If it was a bonus points offer then you could earn thousands of frequent flyer or shopping rewards points.
For example, at the time of writing there’s a $13 discount on $250 Mastercard gift cards at Coles and in recent months we’ve also seen offers of 2,000 Flybuys points on the $100 cards.
Another benefit of these offers is that they allowed people to circumvent restrictions and surcharges on paying the ATO with a points-earning Visa, Mastercard or American Express credit card.
Instead of paying the ATO directly, you could buy the gift cards with a credit card and then use them to pay the ATO without incurring a surcharge (the ATO treat these gift cards as domestic debit cards which no longer have a surcharge as of 1 Jan 2025).
Not all prepaid gift cards sold in Australia permit payments to the ATO but those produced by industry giant InComm Payments have a long history of allowing it.
InComm Payments’ Vanilla Visa and Vanilla/Coles Mastercard products are stocked at both Coles and Woolworths so they frequently appear in the supermarkets’ weekly gift card promotions.
Possible workaround
If you’re sitting on a pile of Coles/Vanilla Mastercard or Vanilla Visa gift cards that you were hoping to pay the ATO with, there might still be some hope.
Some OzBargain users have already reported that they were able to use their gift cards to pay the ATO over the phone, although others have indicated that it didn’t work for them.
Even if this workaround is still possible, it’s unlikely to last for long.
Update
In an email to GCDB, the ATO claimed that it is still possible to make payments with prepaid gift cards:
If the pre-paid card is registered, you should use the details that are registered with the card. If the pre-paid card is not registered, you should use your details provided to the ATO.
When we asked the ATO why payments from Coles Mastercard gift cards were still being rejected even when entering our own details, the response they gave seemed to contradict their earlier advice:
People should check with the gift card issuer what billing details they should be using for online payments.
We have reached out to the issuer of Coles/Vanilla prepaid gift cards to see if there is anything that can be done to allow payments to the ATO but have yet to hear back.
Featured image credit: GCDB, ATO, Visa, Mastercard
Originally published 30 Nov 2025, last updated 9 Dec 2025
16 Responses
When did this occur?
I bought 5 just yesterday and ATO has accepted the payment and its been received and deducted off my tax bill. If I go today and buy more, it won’t work ??
As of Saturday. You can test it for yourself but I’d recommend only buying one new gift card until you do.
Can I ask where you went to enter the card details for payment?
I have been trying since 30/11/25 and selecting the option “pay by credit or debit card” and this is where the problem seems to be as it then directs me to enter personal name/address etc. I dont select to save the card details for future use.
It gets rejected each time. Card services state I need to find a place to pay it that is a merchant store with ATO.
Same
Tried paying via the phone and it did not work.
Well… Heritage Bank and ATO have some answering to do. On the front of the card it says “Use this card everywhere Mastercard is accepted”, which is now categorically false.
I will also be complaining to the ATO that I am not paying their bill, as they have now made it too hard, and too expensive.
Might be obvious – but I guess this change would affect *both* the Coles Prepaid Mastercard and the Vanilla Visa prepaid card products?
Vanilla Visa gift cards would also be affected.
I can confirm that as of tonight, the coles $250 Prepaid mastercard is not being accepted on the ATO website.
Oh no…. Any recommendations to use the $100 visa and master coles gift cards to maximise the benefits as I have quite a few of them? (Buying other gift cards at colesworths?)
That should work, although at Woolworths there are some restrictions (e.g. you can’t buy Woolworths Group gift cards or other prepaid Visa, Mastercard and Eftpos gift cards).
Cheers! I’ll probably give it a go in the next promotions with TCN/Ultimate at those stores
I bought $2500 worth in the promo last week and have not been able to use any to pay the ATO. The card service confirmed that the issue is around this being a gift card and it cannot connect it to a “real person” and only a 3rd party which is why it is declining. Their recommendation is to find any other payment option that does not require you to enter personal details along with the card details. She kept advising that I should may at the merchant store. This is infuriating! Has anyone found an option? I cant use BPAY for it as bpay will only connect to your bank. I am about to try phone banking. HELP!
Can we pay ATO Tax bill using prepaid cards at Auspost?
No, I tried that as soon as I heard about the website stopping payment. The guy tried several options but we couldn’t get it to go through.
The ATO only accepts cash, cheque and eftpos (SAV/CHQ) when paying via Australia Post. The ATO does not accept any payments routed through the Visa nor Mastercard networks via Australia Post, including any payments from Coles Mastercard gift cards.
Any update on this/workarounds?