Collecting tobacco duties and taxes at the border, closing on Wednesday 22 August 2018

The Government is making changes to the taxing point for tobacco as part of a package of measures which will crack down on illicit tobacco. As part of the 2018-19 Budget, the Government announced it would tax tobacco at the border and at the equivalent point of manufacture.

From 1 July 2019, importers will be required to pay all duty and tax liabilities when tobacco enters the country, rather than when it leaves a licensed warehouse and enters the domestic market. This will reduce the potential for leakage from warehouses to the black market.

Although there is currently no licensed commercial tobacco production in Australia, the taxing point for any potential future domestic manufacture of tobacco will also be changed to be consistent with the new taxing point for tobacco imports.

The Government has released exposure draft legislation and explanatory material for amendments to give effect to the Budget announcement. The draft legislation available on this page concerns the proposed changes to the Excise Act 1901, which would apply to any tobacco manufactured in Australia.

Public consultation on the exposure draft legislation and explanatory material will run for two weeks, closing on Wednesday 22 August 2018. The purpose of public consultation is to seek stakeholder views on the exposure draft legislation and explanatory material.

The Department of Home Affairs has separately released the exposure draft on the proposed changes to the Customs Act 1901, which will apply to imports of tobacco. Consultation on these changes is available on the Home Affairs website.

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Reforms to combat illegal phoenix activity – Draft Legislation, closing on Thursday 27 September 2018

In the 2018-19 Budget, the Government announced a package of reforms to the corporations and tax laws to combat illegal phoenix activity.

The proposed reforms include a range of measures to both deter and disrupt illegal phoenixing and more harshly punish those who engage in and facilitate this illegal activity.

The exposure draft legislation includes reforms to:

  • introduce new phoenix offences that target those who conduct and those who facilitate illegal phoenix transactions;
    • It will now be an offence for company directors to engage in creditor‑defeating transfers of company assets that prevent, hinder or significantly delay creditors’ access to those assets.
    • Pre-insolvency advisers and other facilitators of illegal phoenix activities will also be liable, as there will be a separate offence for any person who procures, incites, induces or encourages a company to make creditor‑defeating transfers of company assets.
    • These will be both criminal and civil offences, attaching the highest penalties available under the law.
    • The offences will be supported by an extension of the existing liquidator asset clawback avenues to cover illegal phoenix transactions.  ASIC will also receive a new regulatory tool to recover property that has been transferred under an illegal phoenix transaction.
  • prevent directors from backdating their resignations to avoid personal liability;
  • prevent a sole director from resigning and leaving a company as an empty corporate shell with no director;
  • extend the director penalty provisions to make directors personally liable for their company’s GST and related liabilities;
  • expand the Australian Taxation Office’s existing power to retain refunds where there are tax lodgments outstanding;
  • restrict the voting rights of related creditors of the phoenix operator at meetings regarding the appointment or removal and replacement of an external administrator.

The legislation is tightly targeted at those who misuse the corporate form, while minimising any unintended impacts on legitimate businesses and restructuring.

The proposed reforms follow extensive public consultation undertaken in 2017 and have been informed by the work of the Government’s Phoenix Taskforce.

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(Source: Treasury)

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