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An increase in funding will allow enhanced analytics to crack down on agent compliance.
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Data-driven risk engines to police tax practitioners, says TPB
09 November 2022
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Data-driven risk engines will be used to identify and police tax practitioners who engage in unlawful tax advice, says the TPB, thanks to funding in the budget.
An extra $30.4 million over the next four years would enable the TPB to deploy technology to boost the monitoring of tax agents and provide quality tax practitioner services, the regulator said.
“We believe this investment will enhance community confidence, support high standards in the tax profession and by removing unscrupulous tax practitioners from practice, will deliver additional revenue lost through tax dodging schemes,” Assistant Treasurer and Minister for Financial Services Stephen Jones said.
In its annual report, the board said it would enhance its data analytics capabilities to improve its understanding of key risks and opportunities, including unethical tax agents.
“It’s a positive step in the TPB’s evolution as a regulator,” said CPA Australia’s senior manager of tax policy Elinor Kasapidis.
“Data and analytics help to better target the TPB’s education and intervention activities. This includes a focus on the highest risk operators.”
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“The risk engines will bolster public trust that the profession is providing quality tax services.”
In its annual report the TPB said it worked with the ATO to receive early intelligence of tax practitioners who were inappropriately making claims for themselves or on behalf of their clients.
Despite the close working relationship Ms Kasapidis said it was important the two bodies remained self-reliant.
“It is critical the TPB remains independent from the ATO,” she said.
“The risk engine should increase the ability of the TPB to use more information sources, including ATO referrals, to decide where to allocate its resources.”
In the report, TPB chair Ian Klug alluded to the investment in increasing the board’s capabilities to catch those perverting the tax system.
“We continue to invest in and improve on our data analytics capabilities to improve our understanding of the system, key risks and opportunities,” he said.
“These enhanced capabilities assist in the targeted investigation of those practitioners who choose to do the wrong thing.”
“There is more that can be done, and the TPB looks forward to working with our regulatory partners to further expand and enhance our compliance program with the aim of ensuring that tax practitioners remain a positive influence in the tax compliance of their clients.”
Over the 2021–22 period the TBP addressed over 1,300 complaints and referrals made by the public and clients of tax practitioners.
The TPB also presented 143 submissions to a board conduct committee which resulted in the termination of 65 tax practitioners’ registration, the suspension of 15 tax practitioners’ registration, and other imposed sanctions such as formal cautions.
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