Chartered Accountants Australia and New Zealand (CA ANZ), the Institute of Public Accountants and CPA Australia have lodged a joint submission to Treasury on its Review of Tax Regulator Secrecy Exceptions (Review) consultation paper (consultation paper).

We support the sharing of appropriate information to protect the integrity of the regulatory framework for tax practitioners and the broader system in which they operate. However, we maintain that the confidentiality of ‘protected information’ is integral to that very system. Erosion of taxpayer privacy should only be made by specific legislative amendments to Division 355 of the Taxation Administration Act 1953 (TAA 1953) which particularise what, to whom and when that information can be shared.

We also support the sharing of information and data but have grave concerns about the sharing of suspicions of fraud. A much higher standard is required in justifying an exception to section 355-155 of the TAA 1953 particularly when a person’s livelihood is at stake or vulnerable Australians are involved.

In our submission, we set out how the existing tax secrecy exception provisions can be used by the ATO to help combat fraud in the tax system. 

We also set out our detailed response to the consultation paper, which is as follows: 

• We do not support the creation of a mechanism by which the Minister can approve fraud prevention programs. But we do support a specific legislative provision to enable the ATO to provide information to superannuation fund trustees and the Australian Financial Crime Exchange (AFCX) provided that the ATO is satisfied that the information is about a fraudulent activity
• We do not support the proposal that the Minister be able to allow by ministerial instrument the ATO to share information with non-law enforcement agencies. However, we do support the ATO providing information to AUSTRAC through a specific legislative provision
• The proposals we support for the sharing of information by the ATO involve the research and development tax incentive, and statement of tax record. We recommend a delay to the proposed sharing of information with the Fair Work Ombudsman so that definitional issues can be resolved which will reduce the risk of data being misused
• We support specifically legislating the ATO provision of information to internet service providers with the safeguard of only providing enough information to execute a website block
• We do not support providing the Governor-General with the ability to declare that the ATO and Tax Practitioners Board (TPB) can disclose protected information
• We support allowing the ATO to provide information to financial advisers, provided financial advisers are required to meet the same technological and client identification standards that registered tax practitioners are required to meet, that funding of online services for agents is not diminished, and that separate funding is given to this proposal. 
• We do not support consumer consent being an exception to tax secrecy
• We call for the ATO to be able to advise ASIC of the existence of tax debts when strike off action is in progress to help identify phoenix activity early and minimise the potential harm to creditors
• We also call for changes to overcome the difficulty of whether professional accounting bodies can on-disclose information contained in decision letters (notifications) received from the TPB.