Mandatory reporting obligations for tax practitioners will pose major reprisal and defamation risks, the accounting body warns.
CA ANZ fights rearguard action against TPB legislation
CA ANZ is fighting a rearguard action against legal changes to tax agent regulation that passed through parliament last week.
CEO Ainslie van Onselen has written to the Treasurer calling for a review of Treasury Laws Amendment (2023 Measures No. 1) Bill 2023 and seeking a meeting to discuss “concerns”.
The law, which took in amendments by the Greens, “presented a very real risk of unintended consequence for members who do not work in large firms, with many telling us they are being punished for the actions of a few at the top end of town”, Ms van Onselen said.
“As an example, imposing mandatory reporting obligations on tax practitioners without providing effective protection against reprisal and defamation claims for those reporting and without clarifying the availability of the privilege against self-incrimination for self-reported disclosures, is likely to be ineffective or inoperable.”
“At the same time, the proposal to limit the TPB to people who are members of an organisation with fewer than 100 employees also brings significant risk to our profession. Appointments to the TPB should be merit-based; the board needs suitably qualified members who are experienced in running small practices, but it also needs people who understand how medium and large firms operate.”
The Greens amendments, motivated by the PwC tax secrets scandal and the shadow it has cast over the profession, restrict big four firm partners from being appointed to the TPB and impose requirements on tax agents to report code of conduct breaches by themselves or other agents.
Ms van Onselen said the moves would deprive the TPB of members with cutting-edge information and strip out important strategic skill sets, knowledge bases and insights.
The government should include a review of the amendments in its two-year reform roadmap, she said.
“The government should also consider whether the TPB has adequate funding and resources to implement these previously unanticipated changes. The experience with ASIC’s similar reporting regime suggests that the TPB’s administrative workload and systems changes required may be substantial.”
“I have offered to meet with the Treasurer to directly convey these concerns, and I will await a response with great interest.”
The bill also implements several recommendations from the TPB review and makes its funding independent of the ATO.
Other changes include restricting tax practitioners from employing or using disqualified people to provide tax agent services on their behalf unless they have approval from the TPB. The registration period for tax practitioners will move from three years to an annual.
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