Government Responds to Review of Tax Practitioners Board Following PwC Tax Scandal

Government Responds to Tax Practitioners Board Review Following PwC Scandal

In response to the PwC tax scandal, the government has taken action to strengthen the regulatory arrangements of the Tax Practitioners Board (TPB). The review of the TPB was initiated to ensure that registered tax practitioners have the necessary knowledge and skills to assist clients with their tax affairs in the modern world.

The consultation paper released by Treasury highlighted four key areas of improvement for the registration framework. These include limitations in testing professional associations, rigidity in accounting for special circumstances, the need for additional registration requirements for entities, and revisions to the ‘fit and proper person’ test.

The proposed reforms aim to strike a balance between ensuring the professional competence of tax practitioners while not unreasonably restricting the supply of practitioners. Enhancements to the TPB registration regime are expected to improve the board’s ability to respond to industry trends and administer the scheme more flexibly.

With the majority of Australian businesses and individuals relying on tax practitioners for their tax obligations, a trusted and sustainable tax practitioner profession is crucial for compliance and confidence in the tax system. The government’s proposed reforms seek to achieve a fit-for-purpose registration regime that meets these needs.

Interested parties have until August 7 to provide feedback on the consultation paper, with virtual roundtable discussions scheduled between July 17 and August 7. Additionally, the TPB received $30.4 million in extra funding in the 2022-23 federal budget to expand its compliance program targeting higher-risk tax practitioners.

In a separate review, the government is also examining the use of legal professional privilege in Commonwealth investigations. Concerns have been raised about the misuse of legal privilege claims to obstruct regulatory action, leading to potential harm to innocent parties. Reforms to legal professional privilege in Commonwealth investigations will be discussed in a forthcoming paper later this year.