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The ATO has warned contractors working on the Gold Coast 2018 Commonwealth Games sites that it will be closely monitoring their tax affairs and increasing its on-site presence.
ATO cracks down on phoenix operators
17 September 2015
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3 minute read
Partnering with the Office of Commonwealth Games Coordination, the ATO said it aims to ensure that construction sites are protected from phoenix operators.
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Michael Cranston, ATO deputy commissioner, said construction is one industry that the ATO has identified as containing a high proportion of “phoenix businesses”.
“Given the large number of contractors working on Commonwealth Games construction sites, it’s a good opportunity for us to identify those who might be trying to rort the system,” he said.
Mr Cranston added: "Phoenix operators create an unfair market advantage for themselves by deliberately liquidating companies to avoid paying creditors and then setting up new entities to carry on the same business. This means they undercut competitors.”
The ATO notes that phoenix activity costs the Australian economy $3.2 billion each year, with “honest businesses” losing $2 billion in unpaid debts and the non-supply of purchased goods and services.
The ATO reiterated that it is involved in a number of cross-agency taskforces to tackle phoenix operators, noting that serious breaches can include criminal investigations and prosecutions.
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