Tax Practitioner Governance and Standards Forum - 28 October 2021
Thank you for joining Ian Klug (TPB Chair), Elinor Kasapidis (Tax Practitioner Governance and Standards Forum Co-Chair), Janette Luu (Acting TPB CEO/Secretary) and Nadja Harris (Acting TPB Director of Policy and Legislation) at the Tax Practitioner Governance and Standards Forum (GSF) held on Thursday 28 October 2021. We appreciate your valuable input and have produced a summary of the key messages from the meeting, below.
Opening remarks and introductions
The Co-Chairs welcomed everyone to the Governance and Standards Forum (GSF). The following organisations were represented:
- Association of Accounting Technicians Australia
- Australian Bookkeepers Association
- Chartered Accountants Australia and New Zealand
- Corporate Tax Association
- CPA Australia
- Financial Planning Association of Australia
- Institute of Certified Bookkeepers
- Institute of Public Accountants
- Law Council of Australia
- SMSF Association
- The Tax Institute
- The Australian Taxation Office (ATO)
- The Professional Standards Councils and Authority
- Tax Practitioners Board.
Charter of Tax Practitioner Governance
To assist in the development of the Charter of Tax Practitioner Governance and to provide additional context in relation to Recommendations 3.2, 3.3 and 3.4 of the James Review (relating to the TPB and ATO’s relationship), members sough further information from the ATO in relation to the ATO’s Tax Practitioner Strategy. The ATO advised that it would present additional information relating to the Tax Practitioner Strategy to members at the next GSF meeting.
Members considered a discussion paper proposing key matters to be addressed in the Charter of Tax Practitioner Governance. In particular, members noted that:
- the relationship and respective roles of the TPB and the ATO, and in particular, the TPB’s independence, are important elements that need to be reflected in the Charter
- the Charter should explain to tax practitioners how the TPB, ATO and recognised professional associations work with each other within the regulatory environment, including high level clarification in relation to the sharing of information, data and intelligence
- the Charter should reflect the commitment to collaboration between the TPB, ATO and recognised professional associations in the regulation of the profession
- there should be clarification of the relationship between the TPB and tax practitioners, and the ATO and intermediaries.
It was noted that a working group will be established to draft the Charter of Tax Practitioner Governance, which will be presented to the GSF for input and endorsement at a future date.
TPB and Professional Standards Council (PSC) Memorandum of Understanding (MOU)
Members considered the MOU between the TPB and PSC. In presenting the MOU, the TPB and PSC noted that:
- the TPB and PSC have had long standing mutual interest and working relationship given the overlap in jurisdiction and standard setting in relation to the tax and accounting professions
- to enhance transparency and formalise the relationship, the TPB and PSC decided to enter into a MOU
- this was considered particularly appropriate after the release of the Final Report of the James Review, which noted that enhanced collaboration between the TPB and PSC would aid in harmonising the standards that apply to tax practitioners, as well as reducing red tape for those professional associations who have an approved scheme with the PSC
- the MOU does not override or impact on the current legislative provisions relating to information sharing between the two bodies.
Members noted that the MOU could be clearer in relation to its purpose, and the TPB and PSC agreed that the purpose statement of the MOU could be reviewed to see if amendments are necessary and appropriate
The Co-Chairs presented the draft GSF Work Program, and the following matters were noted:
- The Work Program is a living document, designed to keep track of key items of priority for the GSF.
- Given the extensive amount of work that sits under each item in the program, and concerns raised by Members that the regular cycle of meetings will not be sufficient to deal with the items of work, it is proposed that working groups will be established to progress work items outside of the GSF meeting cycles.
- The timeframes associated with some of the work items are still unknown (for example, consultation in relation to some of the recommendations of the James Review).
- The TPB will provide GSF Members an outline of the work items that can commence immediately, and the external Co-Chair will liaise with members in relation to working group memberships.
- Once the membership of the working groups has been established, a project plan will be prepared to outline how work will be progressed in relation to each working group.
- It was noted that it may be appropriate in some instances for member organisations to elect alternative members to the working groups, depending on subject matter and the expertise of member representatives.
- In relation to the transition of tax (financial) advisers to the Financial Services and Credit Panel, it was agreed that the TPB will work with representatives of the Financial Planning Association (FPA) and SMSF Association separately, with updates to be provided to the GSF at the quarterly meetings.
- In relation to the Modernising Business Registers (MBR) program, it was noted that given the impact of this work on tax practitioners, the TPB and GSF Members will continue to provide input through the MBR consultation process, and updates will be provided at GSF meetings as appropriate.
- In relation to the strategic direction of the TPB, the input from the GSF will be ongoing, with the first item to be discussed in 2022 being the TPB’s Corporate Plan.
- Regarding the Code of Professional Conduct, the PSC noted that it is currently undertaking a review in relation to guidance for professional associations on codes of ethics, which, once completed, will be informative when considering whether additional Code items should be included in the Code of Professional Conduct.
James Review – Items for initial consultation
Members were invited to discuss initial views and positions in relation to Recommendations 4.3 (relevant experience) and 6.1 (sanctions) in the Final Report of the James Review. In relation to Recommendation 4.3, Members noted that:
- the review of the relevant experience requirements should not be limited to BAS agents, but should also be considered for tax agent registration
- there is inequity in relation to the current qualification and experience requirements for registration as a BAS agent as opposed to the requirements required for registration as a tax agent
- the review of the relevant experience requirement for BAS agents needs to take into account the practice structures within which BAS agents largely operate (i.e. sole practitioner practices)
- there needs to be further consideration of the use of formal practical training, as well as the type and verification of experience that the TPB will accept.
In relation to Recommendation 6.1, members noted that it is important that the TPB is provided with a range of sanctions that can be applied to varying levels of conduct.
It was noted that given that Recommendations 4.3 and 6.1 are expected to be included in the first tranche of Treasury consultations, the working groups in relation to these recommendations will be established as a priority.
Proposed deregulation of tax (financial) advisers
The TPB provided an update in relation to the deregulation of tax (financial) advisers, pursuant to the Better Advice Bill, which was passed by Parliament on 21 October 2021. In particular, it was noted the following:
- From 1 January 2022, there will no longer be registered tax (financial) advisers, however the provision of tax (financial) advice services will continue to be regulated.
- Under the new requirements, any entity that provides a tax (financial) advice service for a fee or reward needs to be registered as a tax agent (in most cases with a financial services condition) or alternatively registered with the Australian Securities and Investments Commission (ASIC) as a Qualified Tax Relevant Provider (unless the services are provided by a legal practitioner under certain circumstances).
- The TPB’s communications strategy includes targeted communications to assist the existing tax (financial) adviser cohort with the transition. It was agreed that the TPB will provide the FPA and SMSF Association with draft communications to ensure consistency of messaging.
GSF members agreed that despite the deregulation of tax (financial) advisers from 1 January 2022, insights of the FPA and SMSF Association will continue to be beneficial to the work undertaken by the GSF, and as such, membership of the GSF should continue to be extended to these associations.
The Co-Chairs thanked all attendees and noted that the next GSF meeting will take place in February or March 2022.
Last modified: 11 November 2021