Australia's tax authority is upping the fight against tax cheats with special Phoenix and Trust taskforces.

The Australian Taxation Office has stepped in to lead the newly-prescribed Phoenix and Trust taskforces to tackle ever-present threats arising from "phoenix" businesses and the misuse of trust structures.

The Trust Taskforce, which assesses taxpayers' use of trust structures, comprises a number of agencies, including the Australian Federal Police and the Australian Crime Commission. It is expected to raise A$415 million ($214 million) in liabilities and A$165 million in collections by the end of next year.

“The Trust Taskforce is cracking down on those exploiting trusts to conceal their interests, mischaracterise transactions and artificially deal with trust income to avoid paying their fair share of tax,” said the acting deputy commissioner, Will Day, in a statement.

Other than the ATO, the bodies making up the Phoenix Taskforce include the AFP, the ACC and the Australian Securities and Investments Commission.

According to recent figures, phoenix activity is costing the Australian economy around A$3.2 billion annually. This is where businesses close down to avoid paying creditors and taxes owed, for example, and then re-emerge in a similar form. 

“Businesses are not being paid for the products and services they supply and employees of phoenix operators are losing up to $655 million in unpaid wages and entitlements such as super,” said Day.

“The work being done by the Phoenix Taskforce makes it harder for dishonest business operators to get away with closing down their business, escaping their taxes and other creditors and then re-emerging with a similar business,” he added.