iscover TPB sanctions framework should embed protections in the law: NTAA
BusinessThe instruments in the draft TPB sanction reforms could destroy a tax practitioner’s reputation and should include protections, the NTAA has said.
A submission by the National Tax & Accountants’ Association (NTAA) warned that the instruments contained in the exposure draft regulations and determination for the Tax Practitioners Board sanction reforms would put into effect powers that could destroy a registered tax practitioner’s reputation and livelihood.
As such, the association has called for protections to be embedded in the instruments and in the law.
The submission relates to the Tax Agent Services Amendment (Enhancing Tax Practitioners Board Sanctions) Regulations 2026 (draft regulations) and the Tax Agent Services (Code of Professional Conduct) Amendment (Enhancing Tax Practitioners Board Sanctions) Determination 2026 (draft determination), which was released by Treasury on 3 August.
The regulations and determination support the amending legislation, the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026.
While supporting the policy intent of arming the Tax Practitioners Board (TPB) with a broader range of sanctions that is in line with the 2019 independent review of the TPB, the NTAA underscored that its support is not unqualified.
In its submission, the NTAA said: “The publication and disclosure obligations operate automatically, and do not adequately distinguish conduct going to honesty and integrity from conduct that is administrative in nature.
“NTAA does not doubt that the TPB will approach these powers responsibly. But safeguards that depend on regulator restraint are not safeguards. The protections should be in the instruments and in the law.”
Excluding natural justice hearing rule ‘deliberate’, ‘overreach’
The primary concern raised by the NTAA regarding the reform proposals is the exclusion of the natural justice hearing rule, where under the bill, the TPB may impose an interim suspension of up to 90 days without first conducting an investigation and without giving the tax practitioner an opportunity to be heard. Written notice of the suspension is only required within seven days after the TPB’s decision, and failure to notify the practitioner would not impact the validity of the decision, the submission noted.
“Concerningly, the bill expressly provides that the TPB ‘is not required to observe any requirements of the natural justice hearing rule in exercising the power’ to impose an interim suspension,” the submission said.
“This means the TPB is not required to undertake a formal investigation into the practitioner’s conduct before imposing the suspension, and the practitioner does not have an opportunity to provide input prior to the decision being made.”
The NTAA said that this is not an oversight in the drafting, but rather it is “deliberate” and an “overreach”.
As such, it recommended that the bill be amended so that the threshold for an interim suspension requires an immediate and serious risk of harm, consistent with the stated policy intent. It also recommended removing the provision displacing the natural justice hearing rule. As a minimum, the submission said, it should provide the practitioner an opportunity to be heard within 14 days after the end of the seven-day notification period before the interim suspension takes effect and is published on the register. It also asked that a decision to impose an interim suspension is reviewable by the ART on an “expedited basis”.
Save interim suspension for serious misconduct
Another recommendation relates to the two explanatory statements to the instruments, which the NTAA said describe interim suspension in purely operational terms. It allows the TPB to act quickly to prevent further harm while it carries out its compliance activities, the NTAA said.
“That is accurate but does not reflect the high threshold needed to exercise the power, as established in the explanatory memorandum to the bill,” it said.
The NTAA recommended that both explanatory statements should be amended to state expressly that interim suspension is reserved for highly egregious conduct where it poses a risk of serious harm to clients, revenue, and/or to the tax system.
Elsewhere in the submission, the NTAA expressed concerns about the short consultation period of less than two weeks, following a similar 12-day consultation on the exposure draft of the bill in April 2026.
They called for a minimum eight-week consultation period for draft legislative instruments of this magnitude, with more opportunity for stakeholders to comment on material redrafting before the instruments are registered.
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