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The government has failed to consider the longer-term policy ramifications of the recent spate of legislative changes imposed on tax and BAS agents, the professional body has warned.
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Over-regulation of tax agents jeopardises future tax services: CA ANZ
13 November 2024
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CA ANZ in a recent submission has raised concerns about the multitude of changes to the legislative framework for the regulation and governance of tax and BAS agents.
As part of the government's consultation on the tax promoter penalty laws, the major accounting body said the recent changes needed to be examined at a holistic level with a view to streamlining the regulation.
The professional body stressed that while it does not condone inappropriate behaviour and the promotion of tax exploitation schemes, it was concerned about some of the longer-term ramifications of recent legislative and regulatory changes.
"We are concerned that none of the measures announced and implemented in the last year as part of the government response to the PwC matter have been examined at a holistic level with the view to streamline the regulation of tax practitioners and establishing more collaborative relationships between regulators and tax professionals," the professional body said.
CA ANZ said the government had also failed to adequately consider the potential "longer-term policy ramifications" that may stem from the volume of changes.
The submission said these ramifications include the impact of these changes on the attractiveness of a career in the tax profession and, by extension, whether Australians will have continued access to a sufficient number of private sector tax service providers in the future.
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The submission also raised potential conflict of interest concerns, with the ATO tasked with disciplining promoters under the tax promoter penalty laws.
"With the ATO tasked with collecting revenue and having the ability to penalise tax practitioners and other intermediaries under the tax promoter penalty laws, there is the potential for perceived conflict of interest," the submission said.
"To mitigate that risk, we suggest independence between the ATO and the agency that investigates and penalises promoters under the tax promoter penalty laws."
The submission noted that under the current laws, it is possible for an individual to be penalised in multiple ways for the same activity.
The individual or firm could sanctioned under:
- The promoter penalty laws for the promotion of a tax exploitation scheme.
- The Tax Agent Services Act 2009 for the breach of the Code of Conduct.
CA ANZ has recommended that all conduct-related powers and functions concerning tax practitioners should sit with the Tax Practitioners Board, including the promoter penalty provisions.
"With the current expansion of the TPB’s sanctions power and ability for the ATO to share information, the TPB is well placed to appropriately identify and sanction tax practitioners who are promoters of tax exploitation schemes," it said.
"Furthermore, there would be less duplication of processes and resources could be streamlined."
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