CANBERRA, Australia — The tax office is cracking down on dodgy company directors with a new identification system that will stick with them for life.
Tax Commissioner Chris Jordan will oversee the new regime as part of a national business registration system.
The program aims to make it easier for businesses to fulfill their registration obligations, giving them more time to focus on their customers and business operations. Also, it makes business information more reliable and valuable and thus helps to improve the efficiency of registry service transactions.
It aims to modernize and streamline the business register, bringing together dozens of documents held by the business regulator and the agency responsible for Australian Business Numbers or ABN.
An ABN is a unique 11-digit number that identifies your business to the government and community. One can use an ABN to identify your business to others when ordering and invoicing, avoid tax as you go (PAYG) on payments you receive, claim goods and services tax (GST) credits ).
ABN can also be used to claim energy subsidy credits and obtain an Australian domain name.
“Under this modernized system, businesses will be able to register a business and maintain details of those registrations in one place,” Jordan said during a June 2 Senate hearing.
One of the new tools will be a director’s identification number. An administrator identification number (administrator ID) – is a unique identifier that an administrator will keep forever.
“These numbers will stick with directors for life, even if they stop working as directors, change their names, or move from state to state or overseas,” Jordan said.
He claimed it would be a tool in the fight against illegal phoenix activity, where dodgy executives break up their businesses and transfer assets to others, avoiding paying unpaid costs.
Illegal phoenix activity occurs when a company is liquidated, liquidated, or abandoned to avoid paying its debts. A new company is then created to continue the same commercial activities without debt. When this happens, employees are deprived of salaries, pensions and rights.
Additionally, other businesses are placed at a competitive disadvantage, suppliers or contractors are not paid, and the community loses revenue that could have contributed to community services.
“The direct impact of Phoenix’s illegal activity is estimated at five billion every year,” he said.
“We want to make it easier for companies to meet their obligations, but we want to make it difficult for those who seek to corrupt the system. The (registry) is a great way to help us do just that.
(Editing by Vaibhav Vishwanath Pawar and Pallavi Mehra)