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‘Increasing CPE hours will not increase competency’: Tax Institute

Increasing the number of continuing professional education hours will not improve the professionalism and competency of the tax profession, the Tax Practitioners Board has now been told.

Professional Development Jotham Lian 24 March 2020
— 1 minute read

The Tax Institute has questioned the Tax Practitioners Board’s plan to increase the minimum CPE hours requirement to 40 hours, arguing there is no correlation to improved quality of services.

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“We are given no basis to be satisfied that there is necessarily a correlation between an increase in CPE hours as proposed, and increased professionalism of registered practitioners, and consequently an increase in the quality of tax services provided,” said Tax Institute president Peter Godber.

Under the TPB’s proposal, all tax practitioners will be required to complete a minimum of 40 CPE hours each year, in place of the current 90 hours for tax agents, 45 hours for BAS agents and 60 hours for tax (financial) advisers to be completed over a three-year period.

The change means the flexibility of the three-year period, where tax agents could meet a minimum of 10 hours in a year and make up for it over the next two years, will be dumped for a straight 40 hours minimum requirement each year.

The TPB has argued for the change by noting that it will improve “guidance and professionalism” and simplify regulatory compliance by aligning with the Financial Adviser Standards and Ethics Board’s (FASEA) requirements, which currently stand at 40 hours each year.

“There is no supporting evidence presented in the discussion paper that shows that the current failings of certain registered practitioners are linked to a failure to undertake sufficient CPE and the effect of that failure on their ‘guidance and professionalism’,” Mr Godber said.

“Even if it is accepted for the sake of argument that the proposed increase will improve such outcomes (which is not admitted), the discussion paper does not analyse whether the marginal benefit to the community of improving those outcomes justifies the marginal increase in cost to the registered practitioner community of requiring the additional CPE hours to be completed.”

The Tax Institute has also taken issue with the TPB’s inflexible approach, noting that the strict 40 hours per annum requirement will disadvantage part-time practitioners or those on parental or extended periods of leave.

“It also does not recognise the changing profile of the modern tax profession workforce which includes increasing numbers of workers on flexible or part-time work arrangements who may need to juggle family and other commitments to make the time to meet their CPE requirements,” Mr Godber said.

“The Tax Institute suggests a possible alternative to the TPB’s proposal — that CPE be assessed as 120 hours over three years (consistent with other professional associations and include a minimum requirement of 10 hours a year) rather than as ‘40 hours per year’.”

The TPB’s discussion paper can be viewed in full here, with exposure draft documents soon to be released.

‘Increasing CPE hours will not increase competency’: Tax Institute
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Jotham Lian

Jotham Lian

Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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