Submission on Promoter penalties, Tax Practitioner Board, Secrecy and Whistleblowers
CA ANZ has lodged a submission about exposure draft legislation affecting key elements of the tax ecosystem. This is the start of a two year reform program.
In brief
- A holistic approach to tax reform is needed to ensure policies and interactions are appropriate
- The promoter penalties changes are not proportionate – especially for small/medium practices
- Regulation needs to be streamlined and strike the right balance to improve effectiveness, reduce compliance costs and avoid unintended outcomes
On 6 August 2023 the Treasurer announced a series of legislative changes and reviews of key components of the tax ecosystem.
On 20 September 2023 Treasury released:
- a 2 year roadmap for reform of the tax ecosystem
- exposure draft legislation regarding changes to the following key components of the tax ecosystem:
- Promoter penalties
- Tax Practitioners Board (TPB)
- Tax secrecy
- Whistleblowers
More draft legislation is expected. In CA ANZ’s opinion, this piecemeal approach makes it difficult to understand how the various announcements fit together. CA ANZ has called for a halt to allow for consultation on the overall package of announced measures.
The first batch of draft legislation, especially the changes to promoter penalties, are not proportionate – particularly in relation to small and medium professional firms. These changes are likely to greatly increase governance and insurance costs, financial risk and increase uncertainty, making working in the tax profession less attractive.
The proposed changes that allow the ATO and TPB to provide professional bodies with details of suspected misbehaviour have not considered the financial impact that outsourcing of government regulation will have on the professional bodies. Nor has there been adequate consideration of how co-ordination of ATO and TPB reviews of a tax practitioner will occur. Accountants are already highly regulated and need streamlined, well targeted regulation. The cost of lack of regulatory co-ordination is higher compliance costs that get passed onto taxpayers.
On confidentiality breaches, CA ANZ supports stronger sanctions but also questions why so much tax consultation is shrouded in secrecy. Other jurisdictions implement tax changes and have tax reform discussions in an open and transparent manner. Australia should do so too.
