Proposed changes to the appointment process for members of the Tax Practitioners’ Board (TPB) may be unworkable and limit the pool of relevant expertise to be appointed to the tax agent regulator, according to Angus Taylor, the shadow treasurer.
Taylor told The Mandarin the opposition will not be supporting the amendments to the Tax Agent Services Act 2008 proposed by the Australian Greens to prohibit the appointment of senior office holders with ongoing relationships with organisations that are tax or BAS agents to the regulatory body.
This would include former partners or directors of accounting firms, for example. that have an ongoing pension from an accounting firm that has a tax agent or BAS agent license from being appointed to the TPB.
A financial relationship of that nature could be perceived by outsiders to the disciplinary process as posing a conflict of interest.
The amendments that are currently being debated by the senate would also require people who are tax agents to report colleagues they believe have breached the code of professional conduct to the TPB.
Greens’ senator Barbara Pocock told the senate that the amendments to the appointment process for membership of the TPB were among the initial steps to improving the regulation of tax practitioners.
“We’ve worked with the government to ensure that this bill, with our amendment, will take the first legislative step towards reining in the power of the big firms and shaping our tax advisory structures in Australia to serve our purposes better,” Pocock said.
“It takes a first and significant step to remove the vested interests of big consulting firms from the very board, the Tax Practitioners Board, that regulates their tax business.”
The Greens’ amendments were added to what were already changes to rules related to the work being done by the
Labor senator Deborah O’Neill said that the legislation also contains amendments that ensure the TPB was more independent from the Australian Taxation Office.
“Schedule 3 of the bill amends the Tax Agent Services Act 2008 to increase the independence of the TPB via a special account,” O’Neill said.
“This will provide the Tax Practitioners Board with the ability to control its own budget and manage its regulatory functions. It recognises that the TPB has distinct functions and powers, separate from the ATO.”
The federal Opposition remains concerned that the legislation did not pass through the usual due process so that a properly regulatory impact analysis could be undertaken.
“These are significant changes which are being sought without consultation. In fact, significant stakeholders were first made aware of these amendments through the media. They also have not been examined in detail by any parliamentary committee,” Taylor said.
“Recent events surrounding the conduct of PwC do not meet community standards and the Coalition strongly supports scrutiny of government practices surrounding the Tax Practitioners Board and the broader use of consultants. But that doesn’t warrant rushing this amendment through the senate.”
Taylor also said that the changes risk collectively punishing members of the accounting and legal fraternity that practice in tax “for the acts of a few”.
Nine professional bodies in the accounting and tax world have jointly issued a statement expressing concerns about the impact of the amendments currently going through parliament.
Chartered Accountants Australia and New Zealand, CPA Australia, Institute of Public Accountants, the Business Law Section of the Law Council of Australia, The Tax Institute, Australian Bookkeepers Association, The Institute of Certified Bookkeepers, Financial Advice Association of Australia and SMSF Association have said that they have sought to work closely with the government to explain their reservations about the Greens’ amendments.
“While we have a number of concerns, one concern is how you create protections from false allegations, or claims for lost revenues against someone who has made an allegation,” the bodies’ joint statement says.
“Such protections are afforded under other laws, including the Corporations Act 2001, but they are absent from these proposed amendments.”
The nine bodies said they were seeking what is “normal parliamentary and legislative process of consultation to ensure any amendments consider all impacts and become good law, based on sound and considered policy”.
The idea for amendments the Australian Greens argue will assist in ensuring the tax regulator is more independent when making decisions was in part due to submissions made by University of Woolongong Associate Professor Andy Schmulow.
Schmulow — who specialises in law and has been particularly vocal about weaknesses in corporate regulation — said the amendments proposed by Pocock were based on a submission he provided to the Parliamentary Joint Committee on Corporations and Securities.
“Gratified to see the recommendations made in my Senate submission under the heading “Foxes in charge of henhouse security” reflected in these amendments to the tax practitioners board,” Schmulow said.
Pocock announced the Greens’ amendment last week by saying “we’re kicking the foxes out of the hen house”.
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