Date posted: 02/02/2023

Submission on Strengthening the ABN system

CA ANZ has lodged a submission about the proposal to cancel ABNs if tax returns are outstanding or details are not updated annually

Exposure Draft Treasury Laws Amendment (Measures for Consultation) Bill 2022: Strengthening the ABN system proposes to provide the Registrar with the power to cancel an Australian Business Number (ABN) when:

  • Two or more income tax returns are outstanding, or
  • Annual confirmation of details and the need to hold an ABN is not received by the Registrar.

CA ANZ supports efforts to ensure that Australian businesses are complying with their tax and superannuation obligations, however, these provisions need modification so that red tape is minimised, and appropriate safeguards are in place.  The submission calls for:

  • Red tape be reduced by legislating to allow the Australian Taxation Office (ATO) and Australian Charities and Not-for-profits Commission (ACNC) to transmit the specified annual confirmation details from existing forms that need to be lodged with those organisations to the ABN registrar so that there is no need for an additional form.
  • Safeguards be inserted into the legislation to require that the ABN recipient be advised in writing at least 28 days before cancellation of an ABN warning them of the possible cancellation unless the specified issues that warrant cancellation are addressed – this could be by the ATO if it relates to non-lodgement of returns or the ABN Registrar.
  • Greater clarity of ‘arrangements to lodge’ be provided.
  • The commencement date of these measures be delayed until 2026 to:
    • minimise administrative costs by integrating these changes once into the Modernising Business Registers (MBR) program rather than twice; once as a standalone measure then one that is later integrated into the MBR, and
    • allow ABN holders, especially self-managed superannuation funds (SMSFs), sufficient time to ensure that their income tax return lodgements are up to date.
  • A discretion to reinstate an ABN be introduced into the legislation.
  • A review of the operation of the existing ABN legislation be undertaken, especially regarding the impact of a 2-year imprisonment for misuse of an ABN and the impact of an ABN being cancelled then reinstated back to the date of cancellation on both the ABN recipient and people who deal with the ABN recipient.
  • Communication campaigns, both in anticipation and implementation of the legislation, that clearly state the impact of these changes

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