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Treasury’s proposal to remove the professional association and registration pathway will make it harder for prospective entrants who increasingly rely on this pathway, the professional body has cautioned.
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Changes to registration pathways would ‘create barriers for new entrants’: IPA
09 August 2024
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The Institute of Public Accountants has responded to Treasury's recent consultation on a wide range of proposed changes to the eligibility requirements for tax practitioners registration with the Tax Practitioners Board.
Treasury released a consultation paper three weeks ago proposing changes including a stricter "fit and proper person" test and the removal of professional association recognition and registration pathways.
The paper said the removal of these pathways would improve the TPB's independence from the industry and "mitigate against actual or perceived risk of regulatory capture".
The changes would mean increasing the minimum education requirements for registration, with practitioners already registered under the pathway grandfathered similar to the special rule about pre-1988 tax agents in subsection 20-5(4) of the TASA, the consultation paper explained.
"These tax practitioners would be subject to other non-qualification requirements being met, as well as the TPB’s standard renewal requirements, assuming they maintain their voting membership status with the recognised professional association," it said.
In its submission on the proposed changes, the Institute of Public Accountants said there is no evidence provided in the consultation paper suggesting why this pathway would "diminish the consumer protection afforded under TASA or result in inferior access to quality services provided in an ethical manner".
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IPA general manager of technical policy Tony Greco said this pathway is increasingly being used by prospective entrants as a way of gaining registration.
"Its removal will create barriers to entry for new entrants and its potential removal needs to be backed by evidence that indicates that the objectives of TASA are not met for its continuation," he said.
The IPA noted that the only reason for the proposal included in the consultation paper was that the TPB has limited regulatory rules available in respect of an recognised profession association (RPA) that is non complaint and has limited capability to assess and monitor whether a professional association meets RPA obligations.
Under the proposal to scrap the pathway, Greco warned that many candidates that have the necessary relevant experience as a tax practitioner would be denied access to registration.
The professional body has also undertaken analysis of members who enter the IPA through the special consideration pathway and whether these members had any complaints or disciplinary action against them.
"The evidence concluded that special consideration members who had complaints or disciplinary action against them were minor and low risk and most members who enter the IPA through the special consideration pathway were exemplary members," said Greco.
"IPA has effective mechanisms in place to monitor and take appropriate disciplinary action against all members regardless of entry requirements."
Greco said while the IPA acknowledges the TPB currently has limited regulatory tools available in respect of an TPB Recognised Professional Associations (RPA) that is non-compliant with its obligations under the regime, professional bodies operate in a co-regulatory environment with multiple regulators and standard setters.
"IPA’s compliance framework is consistent with the provisions set out by the Professional Standards Councils (PSC) and Professional Standards legislation. As an association with a professional standards scheme, IPA has yearly mandatory reporting requirements to the PSC to meet legislative obligations and improve IPA’s members’ professional standards which includes consumer protection," the submission said.
"Additionally, IPA’s professional and ethical requirements also stem from its obligation as a member of the International Federation of Accountants (IFAC), which requires its members to comply with IFAC’s Statement of Membership Obligations (SMOs)."
The SMOs are designed to ensure the core competencies of capable and successful professional accounting organisations in serving the public interest.
The SMOs also require its members to adopt and implement the international accounting, auditing ethical and education standards, and establish quality assurance and investigation and disciplinary systems.
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