De-registered tax agents will be banned from providing tax services

At a glance:

• A Senate Committee recently completed an inquiry into the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023.
• The IPA as part of the Joint Tax Bodies prepared a submission for the inquiry, and IPA GM Technical Policy Tony Greco addressed the Committee in support of the submission’s suggested amendments to the Bill.
• The Committee took all amendments on board.
• The changes will make it more difficult for rogue practitioners that have been disciplined to gain TPB registration.

The Senate Economics Legislation Committee has recently completed an inquiry into the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023.

The IPA, as part of the Joint Tax Bodies, prepared a submission that informed the Committee about the impacts the Bill’s proposals would likely have on the tax profession. The submission provided further suggested amendments that would optimise the regulatory framework.

The proposed amendments to the Tax Agent Services Act 2009 would effectively prevent disqualified practitioners from providing tax agent services by making their re-registration almost impossible, which is important for maintaining public trust following recent revelations around PwC’s sharing of confidential government information.

The proposed changes and Joint Tax Bodies submission

The Joint Tax Bodies’ submission supported the design of the provisions that restricted re-registration by increasing TPB oversight and control. The submission was concerned with Schedule 3, which relates to proposed changes to the Tax Agent Services Act 2009. It included comment on (among other Schedule 3 items):

1. Restrictions on tax agents providing services on behalf of disqualified entities: The Joint Tax Bodies argued that, although broadly supporting the design of the provisions, the breadth of the wording would introduce uncertainty, create interpretative complexity, and carry unintended consequences.
2. Granting a single Minister the power to change the Code: While continued improvement supporting the integrity of the profession is supported, the broad nature of the proposed change threatened to reduce the independence of the TPB from the ATO, blur the line between the agencies’ roles, and give too much power over the Code to one Minister.
3. Annual registration and renewal: A shift from the current three-year registration period to annually would place an onerous burden on practitioners while reducing certainty.
4. Funding: The submission did not support an increase in TPB registration fees, instead arguing that Government funding should support adoption of these changes, as well as investment in staff capabilities and IT systems.

Addressing the Senate Inquiry

In March, the IPA laid out proposed amendments in the Joint Tax Bodies submission, one of 122 proposals received by the Committee. Last month, IPA General Manager Technical Policy Tony Greco represented members and the profession at the Committee’s one-day public hearing, before the Committee finalised its view on whether the legislation would pass unchanged.

Following the public hearings the Committee, chaired by Senator for Victoria Jess Walsh, took all of the Joint Tax Bodies’ amendments on board.

The updated legislation will make it more difficult for rogue practitioners to return to providing tax services after being disciplined by the TPB, will ensure the continued high standards of ethics in the tax profession, and will streamline the regulation of tax practitioners.