The Assistant Treasurer has released for public consultation an exposure draft of legislation (and associated explanatory memorandum) which amends the tax law to strengthen director obligations and enhance deterrence of fraudulent phoenix activity as announced in the Budget.

The main aspects of these amendments involve:

• expanding the director penalty regime to superannuation guarantee amounts to make directors personally liable for their company’s unpaid superannuation guarantee amounts;
• enabling the Australian Taxation Office to commence recovery of a director penalty without providing a 21 day grace period where the company’s unreported debt is over 3 months old, regardless of the character of the company’s underlying liability; and
• restricting access to Pay As You Go withholding credits for company directors and their associates where the company has failed to pay withheld amounts to the Commissioner.

Submissions close on 1 August 2011 to allow for the introduction of the measure in the Spring sittings of Parliament.