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Minister defends unpopular new director ID

Minister defends unpopular new director ID

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Far from playing popular politics, a government minister has defended controversial plans for a new director ID, claiming that existing forms of identification are insufficient.

My Business readers reacted angrily after Revenue and Financial Services Minister Kelly O’Dwyer announced the government stands committed to introducing a new Director Identification Number (DIN), despite fears of increased red tape for SMEs.

Initially proposed as a means of cracking down on illegal phoenix activity, Ms O’Dwyer said the DIN could also be used to oversee employee Superannuation Guarantee (SG) contributions.

“It would be great if Ms O’Dwyer could explain the details of just how this new bureaucratic overhead will assist when government agencies already have this plethora of linked databases such as myGov and yet the agencies involved fail to identify the directors concerned or even worse fail to pursue them to fully recover the lost SG funds,” one reader said.

“I know of one instance where the ATO has just given up on pursuing the guilty director and has advised the employee that they will not be receiving any more of their missing SG entitlements.

“There is no logic to support this flawed new Directors ID when there are so many [government] databases linked to existing TFNs [tax file numbers] and the responsible agencies don’t pursue the culprits. It’s just a new excuse for revenue raising.”

However Ms O’Dwyer has defended the DIN, reiterating its importance in reducing the $3.2 billion annual cost of phoenix activity.

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“The government has committed to introducing a Director Identification Number (DIN) as part of a broader package to identify and deter those who might be involved in illegal phoenixing activity,” she told My Business.

“Fast and effective detection of phoenixing activity is critical to prevention and enforcement action.”

According to Ms O’Dwyer, existing forms of identification are insufficient in holding directors to account.

“Current identifier numbers, such as the ACN or ABN, identify an entity rather than an office holder of the entity, and would not therefore assist with identifying individuals involved in illegal phoenixing. Similarly, TFNs are used to track interactions between individuals and the ATO in relation to taxation matters,” she said.

While little detail has so far been released on how the DIN may work, Ms O’Dwyer said that it “needs to be more than just a number”.

“The government will consult on the best way to identify, and to map and track the relationships between, directors and others who may be involved in illegal phoenixing activities,” she said.

Minister defends unpopular new director ID
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