Enhanced Oversight in Tax Advisory: Empowering Regulators for Greater Integrity

In the realm of tax advisory, maintaining the highest standards of conduct and professionalism is not just expected—it’s essential. The Treasury’s recent unveiling of draft legislation and consultation papers marks a pivotal step towards fortifying the integrity of tax advisory services. This initiative, part of the Government’s comprehensive strategy to address tax adviser misconduct, underscores a commitment to uphold ethical practices within the profession.

A New Horizon: The Tax Agent Services (Code of Professional Conduct) Determination 2023

The introduction of the Tax Agent Services (Code of Professional Conduct) Determination 2023 is a testament to the ongoing efforts to enhance the regulatory framework governing registered tax and BAS agents. This significant instrument aims to reinforce the Code of Professional Conduct, introducing more stringent professional and ethical obligations. Key focus areas include:

  • Elevating Ethical Standards: Agents are required to actively uphold the profession’s ethical standards, including holding peers accountable for adhering to the Code of Professional Conduct.
  • Truthfulness in Communication: The determination mandates absolute honesty in communications with the ATO, Tax Practitioners Board, and other government entities, prohibiting false or misleading statements.
  • Conflict of Interest Management: It emphasizes the importance of identifying and managing potential conflicts of interest, with a clear directive to report such conflicts.
  • Confidentiality and Record-Keeping: Agents must maintain confidentiality and keep accurate records of their services for five years, ensuring accountability and transparency.
  • Competency and Supervision: It ensures that services provided are executed competently, under proper supervision, and with adequate internal controls to comply with the Code.

Strengthening the Tax Practitioners Board’s Sanctions Regime

Alongside these measures, a proposal aims to revamp the Tax Practitioners Board’s sanctions regime, introducing a more robust framework to address contraventions effectively. The consultation paper outlines proposals for:

  • Criminal Penalties: Introducing criminal penalties for unregistered practice, ensuring only qualified practitioners offer tax advisory services.
  • Expanded Civil Penalties: Broadening the scope and scale of civil penalties to deter misconduct and ensure compliance.
  • Infringement Notices: A scheme that provides for immediate penalties, adding a layer of enforceability to the civil penalty regime.
  • Voluntary Undertakings and Suspensions: New powers for the Board to engage in enforceable voluntary undertakings with practitioners and impose suspensions, enhancing its ability to respond flexibly to contraventions.

A Commitment to Excellence

These proposed reforms represent a significant leap forward in ensuring that the tax advisory sector operates with the utmost integrity and professionalism. By increasing the power of regulators and imposing more rigorous standards, the Treasury aims to protect the public interest and maintain the reputation of the tax profession.

For tax practitioners, this evolving landscape presents an opportunity to reaffirm their commitment to excellence and ethical practice. As we navigate these changes, staying informed and proactive in embracing these new standards will be key to fostering trust and confidence in the invaluable services provided by tax professionals.

In a world where transparency and accountability are increasingly valued, these measures are not just regulatory requirements—they are the pillars upon which the future of tax advisory rests.