New laws tackle ‘phoenix­ers’

Big Rigs - - NEWS -

THE Fed­eral Gov­ern­ment is tak­ing ac­tion to crack down on il­le­gal ‘phoenix­ing’ ac­tiv­ity that costs the econ­omy up to $3.2 bil­lion per year to en­sure those in­volved face tougher penal­ties.

Phoenix­ing – the strip­ping and trans­fer of as­sets from one com­pany to an­other by in­di­vid­u­als or en­ti­ties to avoid pay­ing li­a­bil­i­ties – has been a prob­lem in the road trans­port in­dus­try for many decades, im­pact­ing ter­ri­bly on driv­ers, own­ers, em­ploy­ees, cred­i­tors and ul­ti­mately tax­pay­ers.

The gov­ern­ment’s pro­posed pack­age of re­forms will in­clude the in­tro­duc­tion of a Direc­tor Iden­ti­fi­ca­tion Num­ber (DIN) and a range of other mea­sures to both de­ter and pe­nalise phoenix ac­tiv­ity.

The DIN will iden­tify di­rec­tors with a unique num­ber, but it will be much more than just a num­ber.

The DIN will in­ter­face with other gov­ern­ment agen­cies and data­bases to al­low reg­u­la­tors to map the relationships be­tween in­di­vid­u­als and en­ti­ties and in­di­vid­u­als and other peo­ple.

“The Turn­bull Gov­ern­ment is com­mit­ted to en­sur­ing in­di­vid­u­als who en­gage in il­le­gal phoenix­ing ac­tiv­ity are held to ac­count and that the reg­u­la­tors are equipped to take stronger ac­tion to both de­ter and pe­nalise phoenix­ing ac­tiv­ity for the ben­e­fit of all Aus­tralians,” Fi­nan­cial Ser­vices Min­is­ter Kelly O’Dwyer said.

In ad­di­tion to the DIN, the gov­ern­ment plans to in­tro­duce mea­sures such as spe­cific phoenix­ing of­fences to bet­ter en­able reg­u­la­tors.

The estab­lish­ment of a ded­i­cated phoenix hot­line to pro­vide the pub­lic with a

❝ The gov­ern­ment is com­mit­ted to en­sur­ing in­di­vid­u­als who en­gage in il­le­gal phoenix­ing ac­tiv­ity are held to ac­count...

— Kelly O’Dwyer

sin­gle point of con­tact for re­port­ing il­le­gal phoenix ac­tiv­ity.

The ex­ten­sion of the penal­ties that ap­ply to those who pro­mote tax avoid­ance schemes to cap­ture ad­vis­ers who as­sist phoenix op­er­a­tors.

The ATO will also be awarded stronger pow­ers to track de­posits from sus­pected phoenix op­er­a­tors, which can be used to cover out­stand­ing tax li­a­bil­i­ties.

■ Mak­ing di­rec­tors per­son­ally li­able for GST li­a­bil­i­ties as part of ex­tended direc­tor penalty pro­vi­sions

■ Pre­vent­ing di­rec­tors from back­dat­ing their res­ig­na­tions to avoid per­sonal li­a­bil­ity or from re­sign­ing and leav­ing a com­pany with no di­rec­tors, and

■ Pro­hibit­ing re­lated en­ti­ties to the phoenix oper­a­tor from ap­point­ing a liq­uida­tor

The gov­ern­ment will also con­sult on how best to iden­tify high risk in­di­vid­u­als who will be subject to new pre­ven­ta­tive and early in­ter­ven­tion tools, in­clud­ing:

■ A next-cab-off-the-rank sys­tem for ap­point­ing liq­uida­tors

■ Al­low­ing the ATO to re­tain tax re­funds, and

■ Al­low­ing the ATO to com­mence im­me­di­ate re­cov­ery ac­tion fol­low­ing the is­suance of a Direc­tor Penalty No­tice

Con­sul­ta­tion on the non-DIN mea­sures will com­mence in the coming weeks.


MONEY GRABBERS NO MORE: Di­rec­tors de­lib­er­ately scut­tling com­pa­nies will be caught.

Min­is­ter Kelly O’Dwyer.

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