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A proposed overhaul of tax secrecy laws aims to improve regulatory oversight and prevent fraud following the PwC scandal.
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Government to relax ATO, TPB rules on sharing taxpayer information
03 January 2025
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The ATO and TPB will be able to share protected taxpayer information to other regulators more readily under a proposal to loosen secrecy laws in the wake of the PwC scandal.
The information would be used to investigate ethical breaches, prevent fraud and for other government purposes including administering the R&D tax incentive and NDIS, according to a recent Treasury consultation paper.
The paper said the PwC scandal exposed limitations in the regulatory framework, including issues with existing tax secrecy laws.
“The PwC matter highlighted that the tax secrecy framework may, in some circumstances, prevent the ATO and TPB from disclosing suspected serious misconduct to relevant agencies to take appropriate action,” it said.
It is the sixth Treasury review launched as part of the government’s PwC response and follows reforms to the code of conduct, laws around prompter penalties and disqualified entities, and strengthening the TPB's sanction powers.
Assistant Treasurer Stephen Jones said the latest proposal showed the government was “continuing to strengthen trust and integrity in our tax system”.
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“Immediately following the PwC tax scandal, the government removed limitations in the tax secrecy laws that prevented the ATO from providing information to Treasury about PwC’s misuse of the department’s confidential information.”
“This consultation paper will explore whether there are any additional instances where it may be appropriate for the ATO or TPB to disclose protected tax information in the public interest.”
Currently, tax authorities are prohibited from disclosing “protected information” that identifies, or is reasonably capable of being used to identify, a taxpayer.
The consultation paper sought feedback on several proposed new exceptions where it might be appropriate for the ATO or TPB to share information, including to support to prevent, identify and respond to fraud.
The paper also sought feedback on disclosing protected information to investigate professional integrity breaches by tax agents and Commonwealth employees.
The threshold proposed was where there was a “reasonable suspicion of breach of a serious crime (relating to fraud or dishonesty)” or “a serious breach of a Commonwealth code of conduct has been committed”, it said.
The paper also proposed allowing the ATO to use or disclose protected information with other government agencies for legislated purposes, including administering the R&D tax incentive and the NDIS scheme.
Other issues for consideration included giving the Governor-General the power to temporarily declare an urgent circumstance in which the ATO and TPB could disclose protected information in the public interest.
“This would enable information to be disclosed appropriately in limited unforeseen and exceptional circumstances that are not contemplated by the existing tax secrecy framework,” it said.
The paper also sought feedback on changes to the tax secrecy regime to address gender-based violence and give financial advisers access to client information.
Consultation on the proposals is open until 28 February.
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