The Bill will see individuals, corporations or other organisations hit with multi-million-dollar penalties if they are caught using or disclosing confidential government taxation information.
The NSW Government routinely consults with external representative industry bodies on tax policy and legislation on a confidential basis. The new offence in the Bill carries maximum penalties of $1,109,900 for individuals and $5,549,500 for corporations if they are found to have used or disclosed confidential government information.
Importantly, persons who conceal the breach of confidential government taxation information will be liable to the same penalties.
The amendment will also allow the Chief Commissioner of State Revenue to report the offending individual or organisation to any relevant professional body and publish details regarding the breach.
The bill also amends the ‘Payroll Tax Act 2007’ to enhance Revenue NSW’s ability to recover tax debts from ‘phoenix’ operators who liquidate companies to avoid paying their debts.
Phoenix activity is a major concern of commonwealth and state regulators, not only because of tax avoidance, but also because of the harm caused to individuals, businesses and other creditors to whom the debts are payable.
Under the changes, payroll tax groupings will be extended to include companies which are in administration or have been wound up, allowing Revenue NSW to recover their debts from successor companies.
In NSW, the payroll tax revenue leakage from phoenix activity has been estimated at over $85 million.
The ‘Revenue, Fines and Other Legislation Amendment Bill 2023’ also introduces a series of changes which promote integrity and compliance and improve the administration of the State’s fines system, including:
- A new offence for evading or attempting to evade tax through a deliberate act or omission. The maximum penalty for this offence is $100,000, 2 years imprisonment, or both.
- An increase in penalties ranging from $27,500 to $110,000 for some offences under the ‘Taxation Administration Act 1996’, such as providing false or misleading information or wilfully destroying records. This brings NSW into line with current penalties imposed by the Commonwealth and other states.
- Creating a new offence for a person who offers or agrees to be falsely nominated, including for driving and traffic offences. While it is currently an offence to nominate another individual, it will now also be an offence to offer or agree to be nominated. The maximum penalty will be $5500 for an individual, or $10,100 for a non-individual.
Minister for Finance Courtney Houssos said:
“The ‘Revenue, Fines and Other Legislation Amendment Bill 2023’ modernises penalties, addresses dishonest business practices like ‘phoenixing’ and promotes integrity. It will also offer greater fairness and transparency for the people of NSW.
“These measures ensure integrity remains at the heart of the NSW Government’s tax system. The new multi-million-dollar penalties send the strongest signal yet that divulging confidential government information won’t be tolerated.
“Since being sworn in, the Minns Labor Government has consistently demonstrated its commitment to the highest levels of integrity.
“Today, we’re putting on notice people who actively and deliberately seek to mislead for personal gain.
“This isn’t just about deterring people from doing the wrong thing but also holding people to account for their deception.”
