Directors to hold IDs

Despite Mr Morrison claiming the measures are targeted at terrorists and criminals, the government said it would also be consulting on reforms to the Australian Business Number system, including the development of a rigorous indentification system for company directors as part of new anti-phoenixing measures.

"We are making sure that small businesses don't get ripped off by other businesses who deliberately go bust to avoid paying their bills with tough new anti-phoenixing measures," Mr Morrison said in his speech.

The ATO will introduce "mobile strike teams" and the government will create a black economy standing taskforce "to prosecute the most egregious cases of black economy activity".

The government said a new multi-agency illicit tobacco taskforce, comprising members of law enforcement, border security and the ATO would also lead new measures to prevent the flow of funds to organised crime syndicates.

From July 1 next year, importers will be required to pay duty and tax liabilities when tobacco enters the country, rather than when it leaves a licensed warehouse and enters the domestic market. It will also be illegal to import tobacco without a permit.

No cash payments over $10,000


The government is also introducing an economy-wide cash payment limit of $10,000, applying to payments made for goods and services from July 1, 2019 with "no quantifable estimated [budget] impact".

Also part of the cash economy package, the government will expand the the taxable payments reporting system to security providers and investigative services, road freight transport and computer system design and related services.

That measure follows findings by the cash economy taskforce last year – led by Michael Andrew – that contractors in these sectors are at high risk of not complying with their tax obligations. The measure is expected to raise more than $600 milliion. The government had already announced the extension of taxable payment reporting to at-risk courier and cleaning industries in response to the taskforce's interim report.

Businesses will also no longer be able to claim deductions for payments to their employees such as wages where they have not withheld any PAYG payments. The government will also remove deductions for payments made by businesses to contractors where the contractor does not provide an ABN and the business does not withhold any PAYG.

In addition, the government willmake changes to the Commonwealth procurement process to require businesses tendering for Commonwealth contracts over $4 million to provide evidence of a satisfactory tax record.

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