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 Tuesday 31 May 2022. 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 GSF. The following organisations were represented:
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Association of Accounting Technicians Australia
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Australian Bookkeepers Association
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Chartered Accountants Australia and New Zealand
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Corporate Tax Association
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CPA Australia
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Financial Planning Association of Australia
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Institute of Certified Bookkeepers
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Institute of Public Accountants
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Law Council of Australia
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SMSF Association
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The Tax Institute
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The Australian Taxation Office (ATO)
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The Professional Standards Councils and Authority
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Tax Practitioners Board.
Charter of Tax Practitioner Governance
The Co-Chairs provided an update in relation to the work that has progressed in relation to Recommendation 3.3(b) in the Final Report of the Review of the TPB. Recommendation 3.3(b) is as follows:
The creation of a Tax Practitioner Governance and Standards Forum and corresponding Charter of Tax Practitioner Governance.
The GSF was advised that the Charter Working Group, established by the GSF to progress Recommendation 3.3(b), met on 21 February and in summary resolved that the Charter should address the following matters:
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the rights and obligations of tax practitioners
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the role of the TPB, ATO, RPAs and how they will interact
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the relationship and interactions of the TPB and the ATO, and in particular, the independence of the TPB, ATO and RPAs
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an explanation to tax practitioners about how the TPB, ATO and RPAs work with each other within the regulatory environment, including high level clarification in relation to the sharing of information, data and intelligence
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a reflection of the commitment to collaboration between the TPB, ATO and RPAs in the regulation of the profession
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clarification of the relationship between the TPB and tax practitioners and the ATO and intermediaries.
In addition, the Charter Working Group agreed that:
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the Charter would be a document that is equally owned by all stakeholder parties (TPB, ATO, professional associations and tax practitioners)
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the primary purpose of the Charter is to inform and educate tax practitioners in relation to the rights, obligations, support and regulatory framework that applies to them.
The GSF resolved that the drafting of the Charter should proceed as outlined, noting that:
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the Charter should appropriately emphasise the issue of independence of the TPB
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there should be further consideration about the inclusion of clients as a party to the Charter
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the Charter should clarify the role of tax practitioners in the eyes of government
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the information under the ‘background’ heading might be more appropriately included as an appendix to the Charter
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the legislative framework, particularly around ATO’s information sharing, should be included.
It was noted that drafting of the Charter would commence, with work continuing through the Charter Working Group and the coming back to the GSF, before being released for consultation to the TPB’s Consultative Forum and the public.
State of the tax profession
GSF members were asked to provide their respective insights about the state of the tax profession. In summary, the GSF noted the following insights:
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Tax practitioners are under immense pressure, with competing priorities in the form of client expectations and obligations, compliance requirements as well as a wide-spread lack of resources within the profession.
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There needs to be greater appreciation of the role of tax practitioners from government, particularly their status and role in emerging projects such as Modernising Business Registers.
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There continues to be increased regulatory requirements on tax practitioners, in addition to the technical expectations and pressures that practitioners are also faced with.
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Some practitioners, particularly those who are new to the profession, are increasingly using offshoring to respond to the pressures facing the profession.
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There are not many newcomers coming into the tax profession.
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From a regulatory perspective, practitioners are looking for more support and less hard line regulation.
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The tax system as a whole needs to be reviewed to be more resilient.
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In-house tax areas are also under resourcing pressures and this is resulting in work being outsourced to tax practitioner firms.
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Similar pressures are facing the financial adviser profession.
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Tax practitioners are looking for greater technological and service support from the ATO.
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The ATO is facing its own resourcing constraints, and is required to prioritise requests from the profession for further technological and services support against the wider ATO priorities in administering the system.
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The ATO is also exploring how it can support tax practitioners through the ATO’s lodgement program.
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Cyber security and fraud continues to be a huge risk facing practitioners, the ATO and the TPB.
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Obtaining appropriate and affordable professional indemnity insurance is an emerging challenge for the profession.
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There needs to be greater emphasis and clarity around the TPB being the regulator of tax practitioners and the ATO as the administrator of the tax and super system.
The TPB also provided the GSF with an update from the recent a bi-annual survey conducted across both consumers and tax practitioners. In summary, the TPB advised of the following highlights from the survey results:
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91% of consumers use a tax practitioner at least once a year. Loyalty to tax practitioners continues with 61% of consumers now reporting that they have used the same tax practitioner for more than five years.
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54% of surveyed consumers indicated that they know their rights in the case of a tax practitioner operating outside of the law.
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94% of consumers responded that their tax practitioner is taking reasonable care in preparing their tax returns, and 91% of consumers stated that their tax practitioner asks the correct questions to help complete their tax return.
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From the results 43% of tax practitioners had heard, seen or experienced something that impacted how they felt about the TPB, with the majority being positively impacted.
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On a review of the TPB’s effectiveness among tax practitioners, the TPB were seen as being most effective at allowing tax practitioners to understand their obligations (83% agreement) and ensuring they were registered (80%).
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Respondents indicated that the TPB was less effective at communicating with consumers about the importance of using a registered agent (57% agreement); and implementing compliance programs (59% agreement).
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The TPB also surveyed tax practitioners to understand whether they accessed TPB policy and guidance material, with 83% of tax practitioners answering that they did and 38% of respondents saying that they accessed it at least monthly or more frequently.
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The TPB also asked tax practitioners to comment on the TPB’s efforts to reduce red-tape (by minimising the burden for tax practitioners to maintain their registration), with 82% of respondents indicating that the TPB had been responsive in this area.
The TPB advised that it would share a summary of the TPB Survey results with GSF members in due course.
Areas of focus for a new government
Having regard to the factors affecting the profession, GSF members discussed areas they considered to be of priority in relation to the tax profession, for the new government and relevant Minister, once appointed. One area that was identified was the need for further consideration of the recommendations arising from the Review of the TPB, and which recommendations, in the GSF’s view, should be of higher priority than others.
TPB and ATO Engagement Plan
The draft TPB and ATO Engagement Plan, developed in accordance with Recommendation 3.3(a) of the Review of the TPB, was presented for discussion and feedback. The TPB and ATO Engagement Plan is intended to provide high level clarity and transparency about how the TPB and ATO work together, with a number of subsidiary documents that will sit underneath the plan to provide further detail. In summary, in addition to some wording changes, the GSF provided the following feedback:
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Further consideration on whether the plan will be public facing is needed, or whether additional documents that are more digestible and pitched at the practitioner/public would be more appropriate.
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The independence of the TPB is a critical issue that needs to be appropriately reflected in the document.
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How the document interacts with the Charter of Tax Practitioner Governance needs to be made clear, and consideration is needed on the timing of publication of these documents.
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There needs to be greater emphasis on the TPB as the regulator of tax practitioners, as distinct from the ATO’s role as the administrator of the tax and super systems.
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The plan is seemingly focussed on compliance and negative tax practitioner behaviour, and does not address how the TPB and ATO will support the vast majority of compliant practitioners.
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There should be further consideration on the practitioner experience and what the plan, or supporting documents will actually mean to tax practitioners.
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Instead of an emphasis on strengthening regulation, there should be an emphasis on more efficient regulation, that is, being responsive to those that are non-compliant or higher risk, without imposing unnecessary red tape on the rest of the profession.
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There should be further clarity around the funding of the TPB.
The TPB and ATO thanked the GSF for the feedback and advised that it will continue to work on the Engagement Plan and come back to the GSF in due course.
Concluding remarks
The GSF was thanked for recent out-of-session feedback provided in relation to the TPB’s Corporate Plan. It was agreed that engagement will occur in relation to the measures in the Corporate Plan earlier in the process going forward.
A matter raised for discussion was in relation to cryptocurrency, and the pressures that tax practitioners are currently facing in providing appropriate and timely advice to clients in relation to an emerging and complex issue.
The above two items will be discussed further at the next GSF meeting.
It was agreed that the next GSF meeting will take place in person in Sydney, with the ability to attend via videoconferencing for any members who require it.
Last modified: 24 June 2022