The Joint bodies have lodged a joint submission with Treasury in response to the Senate Economics Legislation Committee’s inquiry into the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023 (the Bill), specifically Schedule 3 which relates to proposed changes to the Tax Agent Services Act 2009 (TASA).

The Bill implements the first tranche of measures following the Government's response to the Review of the Tax Practitioners Board (TPB). The Joint bodies are the external professional body members of the Tax Practitioners Governance and Standards Forum (TPGSF).

Some key points in the submission include:

• We support the inclusion of provisions targeting disqualified entities seeking to engage a tax agent to provide tax or BAS agent services on their behalf. However, the newly inserted provisions introduce the unfamiliar concept of tax agent services provided “in connection with an arrangement with a disqualified entity”. The wording is so broad proposed Code item 16 (s 30-10(16)) ostensibly captures services provided by tax practitioners to their clients where the client themselves or potentially employees or contractors that they use, fall within the definition of “disqualified entity”. We don’t believe that this is intended, but due to the definition of “disqualified entity”, the entity need not be a tax practitioner in order to be a disqualified entity for the purposes of Code item 16.
• We recommend that the two new Code obligations commence no earlier than the second quarter after Royal Assent to allow adequate implementation time for tax practices and time for the TPB to develop and issue guidance in consultation with the profession through the TPGSF. Currently the commencement date will be a maximum of 3 months, but potentially a minimum of only one day. Even the maximum period of 3 months will be a very tight timeframe to develop and implement the governance procedures, policies and systems that are necessary to meet the Code obligations. 
• We reiterate our concerns about the Minister having the power to elaborate on or supplement the Code of Professional Conduct, as the Code is the centrepiece of the TASA with serious consequences for breach.
• We also reiterate our concerns about the inclusion of the concept of “tax system integrity” in the Object of the TASA, on the grounds that it may reduce rather than enhance the independence of the TPB from the ATO.

The effective implementation of the proposed changes requires the TPB to administer the disqualified entities regime including the approvals process, and enforcement of the Code obligations and notification requirements. The Government should ensure that the TPB is properly funded to adopt these changes.

The TPB should consider preparing an equivalent of the ATO’s Law Companion Rulings, such as a TPB Law Companion Guideline on the Bill, that is developed now while the Bill is in Parliament in conjunction with the TPGSF external members.