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Draft provisions from the Assistant Treasurer include measures on integrity, conflicts of interest and confidentiality.
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Code of conduct aims to tighten ethical standards
11 December 2023
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The government has released a draft of its proposed revisions to the tax agents code of conduct as part of a raft of measures designed to tighten controls in the wake of the PwC scandal.
The draft outlines changes relating to additional obligations, integrity provisions, false or misleading statements, conflicts of interest, confidentiality and competence.
It goes hand in hand with a consultation paper on strengthening the sanctions of TPB and ushers in a sequence of Treasury-led reviews in response to the PwC tax secrets affair.
The code of conduct legislative instrument changes the Tax Agent Services Act 2009 and, releasing the draft, Assistant Treasurer Stephen Jones said it included measures to manage conflicts of interest, prevent unauthorised disclosure of confidential information, require disclosure of investigation or sanctions to a client, and put in place “adequate supervision and quality assurance arrangements”.
“This is the first of eight Treasury‑led reviews announced by the government in its PwC response,” Mr Jones said. “It follows an immediate package of reforms introduced to parliament in Treasury Laws Amendment (Fairness and Accountability) Bill 2023, measures to increase TPB independence in Treasury Laws Amendment (2023 Measures No. 1) 2023, and $30 million in the October 2022‑23 budget for the TPB to target high-risk practitioners.”
The draft includes some provisions likely to prompt a response from professional bodies, including a requirement that tax agents “take reasonable steps to hold each other accountable: (i) for compliance with the code; and
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(ii) to protect public trust and confidence in the integrity of the tax profession and tax system”.
It underlined that a registered agent had “an obligation to notify the board of significant breaches of the code”.
Under the independence provisions, it said an agent involved in any activity for a government agency must “take reasonable steps to identify and avoid any material conflict of interest (real or apparent)” and where that arose, take steps to make the agency aware of it.
Confidentiality provisions would require an agent not to “disclose any information you have received, directly or indirectly, from an Australian government agency in connection with any activities you undertake” except under specified circumstances.
Agents must also refrain from using information from a government agency for personal advantage, or the advantage of an associate, employee, employer or client.
Competency provisions enshrined a requirement to keep “complete and accurate records relating to the tax agent services you have provided to each of your clients, including former clients” that must be retained for five years.
For quality assurance, agents would be required to maintain “adequate internal control procedures … to ensure your compliance with the Code of Professional Conduct”.
There was also an obligation to keep clients informed of “any matter that could be reasonably relevant and material to a decision by a client to engage you” and how a client could make a complaint.
Consultation on the draft is open until 21 January.
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