Australian Tax Crackdown Nets AUD313m

by Mary Swire, Tax-News.com, Hong Kong

30 July 2009

Australia’s Assistant Treasurer, Nick Sherry, has announced that two anti-tax avoidance campaigns – “Project Wickenby” and the targeting of “phoenix” companies – have yielded a total of AUD313m (USD260m) in tax liabilities and penalties in the last fiscal year.

Project Wickenby has, since 2005, targeted a range of tax avoidance and money laundering schemes, including offshore arrangements, and is a cooperative partnership between five key government agencies, including the Australian Taxation Office.

Sherry disclosed that, during the year ended June 30, 2009, Wickenby raised AUD230m (USD190m) in tax liabilities and collected AUD40m (USD33m) in cash. In addition, Wickenby collected AUD159m (USD131m) in tax from people who have been subject to Wickenby action in previous years.

Furthermore, over the period since its initiation, Wickenby has raised AUD406m (USD334m) in tax liabilities and collected AUD117m (USD96m) in cash, and has been responsible for restraining AUD76m (USD63m) of assets under proceeds of crime legislation. The government, Sherry continued, has provided “AUD122m [USD101m] extra funding for Project Wickenby investigations over the next three years."

The targeting of phoenix practices, meanwhile, generated more than AUD83m (USD68m) in tax and penalties. Phoenix companies are those that deliberately go into liquidation to avoid tax and other liabilities, before re-emerging as another corporate entity with largely the same management. Such companies, according to Sherry, "deny vital funds to Australian public services and even cheat employees of wages, superannuation and other entitlements.”

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