The Tax Office is giving company directors an extra two weeks to apply for its new compulsory director ID program, with around 700,000 yet to sign up ahead of the original deadline on Wednesday.
The director ID is a unique 15-digit identifier that from Wednesday is a requirement for all directors. It has been introduced as part of the troubled modernising business register program and a key anti-fraud measure.
Obtaining the life-long ID requires directors to verify their identity with the Australian Taxation Office through a myGovID. The ATO expects director IDs to limit the $5 billion lost to illegal phoenix activity each year.
Failure to obtain an ID could attract penalties or offences, but the tax office is promising a “reasonable” approach to supporting applications and a “pragmatic” approach to compliance,
In a statement released on deadline day, ATO Commissioner of Taxation Chris Jordan said no action would be taken against directors in relation to their application if they apply for an ID by December 14.
“Over 1.8 million directors have now applied for their director ID, with almost 78,000 directors applying in one day alone on 29 November 2022,” he said in a statement.
“But with the total director population in Australia estimated to be more than 2.5 million, this means around 700,000 directors still need to apply.”
The director ID is a key plank of the ATO’s modernising business registers program. The program received an additional $166.2 million in the October budget, including $86.2 million to administer the director ID component.
The former Coalition government began the modernising business register project in 2019 to replace dozens of business registers, including the 30-year-old Australian Business Register, with a single platform operated by a one-stop shop service called Australian Business Registry Services.
In July, the new Labor government revealed the project would cost another $1 billion to complete after being told by Treasury that the project was “not properly resourced, behind schedule, and over budget”.
The ATO was subsequently given another four years to complete the overhaul after it became clear the new registry platform would not be ready.
Around half of funding allocated before the October Budget had been spent outsourcing key functions of the project, with consulting giant Accenture brought in for the bulk of the work and billing the ATO more than $70,000 a day.
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