The Senate Standing Committee on Economics called for public submissions on the Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019.
We connected and received feedback from a wide range of our members, including our Insolvency Management Committee.
Chartered Accountants ANZ prepared and lodged its submission to the Senate Standing Committee on 14 March 2019.
CA ANZ supports reforms to combat illegal phoenix activity, however we consider that this could have been achieved via amendments to existing laws.
The key points of our submission:
- Overall, we support reforms to combat illegal phoenix activity, however we consider that this could have been achieved via amendments to existing laws rather than new, highly complex legislation.
- We support reforms to prevent back dated director resignations and preventing a sole director from resigning. The amendments should be extended to prevent the number of directors being below the minimum specified in a company's constitution.
- We do not support the ATO being able to estimate GST liabilities, as no justification has been provided for not using the existing default assessment provisions. Further, we consider that the dispute process regarding GST estimates leaves taxpayers open to penalties that are more severe than those under the existing tax law.
- We are concerned that the amendments to allow the ATO to retain refunds are too broad and should be amended to apply only to specific phoenix situations.
- We recommend additional resources are allocated to the education of directors, particularly those associated with start-up entities.