The Government response to the Review of the Tax Practitioners Board (TPB) was released on 27 November 2020. We welcome the announcement by the Minister for Housing and Assistant Treasurer, The Hon Michael Sukkar MP, which recognises the important role and good work we do in the regulation of tax practitioners. The Government’s response will result in us being more effective and independent, reduction in red tape for tax practitioners, enhanced community confidence and support for high standards in the tax profession.
 
In response to the 28 recommendations of the final report of the Review, the Government has announced that it supports 20 of the Review recommendations in full, in-part or in-principle. The Government will begin to implement a range of reforms to the Tax Agent Services Act 2009 (TASA) and the Tax Agent Services Regulations 2009 (TASR) and consult broadly on a range of other measures.

The Assistant Treasurer also recognised the need to update the TASA to acknowledge that we are a more mature organisation, that is no longer in start-up phase. These welcome reforms bring key changes to enhance our effectiveness. They will:

• further enhance and strengthen our position as an effective, independent regulator
• reduce red tape for tax practitioners
• bolster eligibility requirements to ensure that only those individuals and entities that meet high standards of ethical and professional behaviour can obtain tax practitioner registration
• further protect consumers of tax practitioner services by improving the integrity of the tax practitioner profession and provide greater community confidence
• support whole of government approaches; and
• increase collaboration with our co-regulators.

As certain reforms are implemented, we will provide further information and guidance to assist you and other stakeholders. We will also work with the Treasury and Government to support consultation on the other measures proposed, ensuring the best outcome for you and taxpayers who rely on tax practitioner services.

Warm regards
Ian Klug AM

The Government will retain the TPB as the statutory authority responsible for regulating tax practitioners. However, the Government agrees that the regulatory overlap should be reduced and the disciplinary model for tax (financial) advisers will be reviewed as part of the process of establishing a new central disciplinary body. This is in line with Recommendation 2.10 of the Final Report of the Financial Services Royal Commission. The new system will cover all financial advisers, including tax (financial) advisers.

We will have greater independence from the Australian Taxation Office (ATO), so there is clearer accountability and responsibility to the public and Government. This will provide confidence that our disciplinary actions are imposed by an independent regulator. As a part of this, the Government will increase our financial independence from the ATO.

Our registration renewal process will move to an annual registration cycle. Registration fees will be determined as part of a Charging Arrangements Review. It is expected that the annual registration fee should be pro-rated, in comparison to the current fee payable for a three-year registration period. We’ll keep you updated with any developments in relation to changes to the renewal process via future editions of eNews and social media.

The Government’s response has asked us to undertake a contemporary review in relation to the primary qualifications that are required to register as a tax practitioner. This will ensure education and experience requirements are set at the right level to further enhance the community’s confidence in the tax profession. The review will allow the Government to consider if changes are required to the TASR to give greater flexibility to accept other qualifications that may not fall within the traditional course of study.

While there are a number of sanctions already available to us, the Review identified a gap between existing low-level and high-level sanctions. Further consultation will be done to determine the appropriateness for us to have new sanction powers. Our ability to commence investigations to address conduct by tax practitioners who are no longer registered or have sought to surrender their registration will also be strengthened.

The Government noted the need to expand the information available on our TPB Register, including more detailed reasons for tax practitioner sanctions, to better safeguard and protect consumers. The community should have transparency to make informed decisions regarding their use of tax practitioner services. Consultation will be undertaken on the scope of information to be included on the Register and how long the information should remain publicly available.

The Minister will be given a legislative instrument power to be able to supplement the Code of Professional Conduct (Code) to address emerging or existing behaviours and practices to ensure it remains contemporary. The legislative instrument process would also ensure appropriate consultation with key stakeholders and parliamentary oversight. Any proposed changes to the Code will be considered first by the Tax Practitioner Governance and Standards Forum.

There will be further consultation on a range of possible reforms, including: 

• reviewing the ‘fit and proper’ requirements to reduce compliance risks and enhance red tape reduction
• consideration of the current limitation on formal information gathering and the 6-month timeframe to conduct an investigation
• determining if an amendment to the TASR is appropriate to amend the amount and nature of relevant experience required to be registered as a BAS agent
• possible changes to the company and partnership tax practitioner registration requirements relating to accountability and governance.

For further details of the reforms and consultation announced by the Government, visit the Treasury website to view the Final Report and the Government Response to the Review. You can also read our News article.