Volume 16, Issue 1 – Giardina & Pinto

A PROPOSAL TO ADDRESS THE IMPACT OF FRAUDULENT PHOENIX ACTIVITIES ON UNREMITTED SUPERANNUATION GUARANTEE CONTRIBUTIONS IN AUSTRALIA

By Anna Giardina and Dale Pinto

This article explains and investigates fraudulent phoenix activities in Australia, the nature of the problem and its size. Phoenix activity is prevalent in the area of unremitted employees’ superannuation guarantee contributions. The Commonwealth Government has increased its efforts to combat fraudulent phoenix activities however this article proposes new measures to combat fraudulent phoenix activities, specifically in relation to unremitted superannuation contributions and through improved online reporting relationships between the Australia Tax office and compliance of companies. This article also highlights the consequences of fraudulent phoenix activities whereby employees can lose their superannuation entitlements, creditors cannot recover their money and the government loses on non-payment of taxes, superannuation, workers’ compensation premiums and long service leave contributions. The effect of phoenix activity has further implications on the broader community, as more of these people will need to seek government assistance in the form of aged pensions when they retire.

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