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The Tax Practitioners Board is set to become independent of the ATO as the government agrees in principle to transition the regulator into a standalone agency.
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Government to distance Tax Practitioners Board from ATO
27 November 2020
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The independent review of the TPB, led by tax stalwart Keith James, has also recommended that the TPB receive its own funding directly from the government, noting that current funding allocation from the ATO’s budget has failed to reflect an appropriate level of independence.
The final report has also taken aim at staffing arrangements between both agencies, pointing to how all staff, including board members and the CEO, are technically ATO employees due to funding arrangements.
The government has agreed that the TPB’s independence should be enhanced, noting that it will “take steps to increase the TPB’s financial independence from the ATO”.
To further improve the level of independence, the review has also recommended that the position of TPB chief executive be accountable to the board and become a statutory appointment rather than, as at present, an ATO employee on secondment to the TPB.
The government, however, does not accept the recommendation in making the role a statutory appointment.
Instead, the government notes that the position of CEO will be made accountable to the board, administratively.
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A change in registration fees?
The move to a financially independent TPB could potentially impact registration fees paid by practitioners.
A separate recommendation within the final report has called for the current three-year registration period to be converted to an annual basis, with fees pro-rated to current fees payable for the three-year registration period.
While the government has agreed to move to an annual registration cycle, it suggests that the final decision around registration fees will come after it determines how to transition the TPB to become financially independent of the ATO.
Tax practitioners have already seen fee hikes in recent years after the government announced in its 2018 budget that it would provide $20 million to the TPB by way of increasing registration fees.
The government has also subjected registration fees to annual consumer price index adjustments since 2019, with fees increasing again this year in the midst of the pandemic.
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