Government makes positive noises on DINs
Yesterday the Minister for Revenue and Financial Services announced
the Federal Government’s intention to introduce a Director
Identification Number (DIN) and a range of other measures to both deter
and penalise phoenix activity.
Adopted from the great work of Prof Helen Anderson, the DIN was a policy
position ARITA first adopted in 2014 in our Platform for Recovery
paper. This was subsequently also taken up by the Productivity
While it isn’t a panacea, we are delighted to see the Government bringing this forward to assist liquidators in their work.
According to the Minister's media release
, the following anti-phoenix measures are proposed as part of the package:
- Specific phoenixing offences to better enable regulators to take action
- The establishment of a dedicated phoenix hotline for reporting illegal phoenix
- The extension of the penalties that apply to those who promote tax
avoidance schemes to capture advisers who assist phoenix operators
- Stronger powers for the ATO to recover a security deposit from
suspected phoenix operators
- 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
- Prohibiting related entities to the phoenix operator from appointing a liquidator.
The Government is also proposing new preventative and early
intervention tools that will apply to high risk
- 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.
We are broadly supportive of the other anti-phoenixing measures, but have
already expressed our concern to the Government about the cab-rank
approach to appointing liquidators. The Government has announced that consultation on the anti-phoenixing measures and how best to identify high risk individuals will commence shortly. ARITA will be involved in this process.
Members are welcome to provide any comments about the proposed reforms to the Specialist Team