Laws to expand TPB powers pass parliament

Under the new law, unregistered preparers will be subject to five criminal offences if they provide tax agent or business activity statement services for a fee, advertise tax agent and BAS services, or make a false representation of being a tax or BAS agent.

The maximum penalty for the offence is 40 months’ imprisonment, or 200 penalty units, or both.

The amendments also increase the maximum penalty amounts for all civil penalty provisions (including the new civil penalty provisions) from 250 penalty units for individuals to 2,500 penalty units, and from 1,250 penalty units for bodies corporate to 50,000 penalty units for bodies corporate and significant global entities (SGE).

“The increased penalty amounts provide an appropriate and strengthened deterrent for unethical behaviour targeted by the civil penalty provisions,” the government said.

The government previously released a consultation paper on enhancing the TPB’s sanctions regime in December 2023 in response to the PwC tax leaks scandal. It also announced the reforms in the 2025–26 federal budget.

In her speech to the Senate during the second reading of the bill, Greens senator Barbara Pocock said the Greens support strengthening the TPB and imposing stronger penalties for tax adviser misconduct.

“We recognise the good work of many people in the TPB. The PwC scandal would not have surfaced if not for the diligence and the determination of the TPB, in particular, Mr Michael O'Neill, who was tenacious in his tracking down and bringing into the public view a range of scandals and their concealment,” Pocock said.

“We support increasing the penalties available where people deliberately undermine the integrity of our tax system, but the job doesn't stop there. We know the TPB is an important regulator, and these are welcome changes, but it's nowhere near enough to address the core problem here.”

Pocock continued: “These reforms are a step forward, but they are modest in their scope and size in response to multiple mass scandals that expose something much bigger, a fundamental problem with corporate power, regulatory capacity and accountability in Australia, especially in relation to the big four.”

Pocock said the Greens secured an amendment to the previous bill that banned partners from the big four accounting firms from sitting on the TPB, but added that the party will keep pushing the government to go further.

“We need a comprehensive response to the consulting sector's failures rather than a series of narrowly targeted legislative amendments that leave the underlying concentration of power in these very large partnerships,” she said.

“These reforms are a good step forward. They close some gaps by increasing penalties and increasing accountability. But it does not guarantee that another scandal cannot happen. How many of these scandals are we going to have to put up with before we see action?

“Australians want regulators that are strong enough and bold enough to take on the big end of town. It's time for Labor to act.”

The new law stipulates that if the TPB terminates a practitioner’s registration, it can prohibit the person from reapplying for registration for up to 10 years, up from five years under the previous law.

Labor senator Deborah O’Neill said in her speech to the Senate during the second reading of the bill that this period has been extended “to make sure that there’s actually a disincentive for people to do the wrong thing once caught”.

“The measures I'm talking about here complement a broader suite of government reforms that are about strengthening integrity and accountability across the tax system and across the professional services sector,” O’Neill said.

Commenting on the broad range of measures to expand TPB’s powers, O’Neill said: “There are people out there who are claiming on behalf of Australians, who haven't got the skills and aren't doing the right thing and they're putting their clients in a bad situation.”

“There are people, even amongst those, who are getting returns and keeping money that should be going to Australians. They're doing the wrong thing.

“I'm sure that somewhere down the track somebody will call this 'red tape'. 

“But, for me, this is about protecting ordinary, hardworking, decent Australians who understand that the local roads won't get better, their schools won't get funded and they won't be able to go to hospital when they need to unless they pay a fair amount of tax – a fair amount; no more, no less – and certainly not be ripped off by the person who's providing tax advice to them.”

The bill is now awaiting royal assent.