Insolvencies rise as tax audits bite
There was a sharp rise in corporate insolvencies in the first half of 2003, according to figures just released by the Australian Securities and Investments Commission. The data show that 3,396 companies entered into external administration which represents a 13 per rise on similar periods in 2001 and 2002.
Tax and insolvency experts believe the rise is due to tougher tactics by the Australian Taxation Office, including GST audits, more vigorous pursuit of late payments and warnings to directors about personal liability for tax debts. Some analysts say the building industry has been particularly targeted. The Master Builders Association said a number of builders have run into GST-related problems.