A group of professional associations representing the tax and accounting profession are continuing their push to have the new code obligations contained in the Tax Agent Services (Code of Professional Conduct) Determination 2024 withdrawn.
Accounting bodies along with the SMSF Association and The Tax Institute have hit out at recent comments made by Assistant Treasurer Stephen Jones this week that practitioners and accounting associations were consulted throughout the development of the eight new obligations.
In comments provided to Professional Planner, Jones stated that “tax practitioners and their professional associations were consulted throughout the development of the code as it was proposed, including in the weeks before the government’s announcement to introduce the new obligations”.
In a statement released on Wednesday, the joint bodies said the assertion that the associations and the wider industry were consulted on the sweeping changes in the determination was false.
The joint bodies said while a draft determination was released in December, substantial changes were made by the minister including requirements in section 15, which were not included in the original draft determination.
Many of the concerns raised by the joint bodies in relation to the original exposure draft were also disregarded by the government.
The joint bodies also stated that there was no further consultation or engagement undertaken by the Minister on the determination after January, six months before it was registered in July 2024.
“Only after the determination was registered did the joint bodies became aware of a new notification obligation in paragraph 15(2)(c), which was not previously in the exposure draft or subject to any consultation. It requires registered tax practitioners to report clients to the Commissioner if they do not correct false or misleading statements within a reasonable time,” they said.
The professional bodies are also deeply concerned by section 45 of the determination, which requires practitioners to notify current and prospective clients of any matter that may significantly influence a client’s decision to engage or continue to engage the practitioner to provide tax agent services.
While the assistant treasurer has announced that firms will have until either January or July 2025 to meet their new code obligations, the transitional period is conditional upon an undefined concept of “[continuing] to take genuine steps towards compliance during this period”.
The bodies said this further adds to the uncertainty for practitioners.
“Without clarity around the transitional period, every practitioner is facing a commencement date of 1 August 2024,” they said.
Matthew Addison, co-chair of the TPB’s Tax Practitioner Governance and Standards Forum, said while the government consulted on the original exposure draft of the determination, substantial changes have been made without consultation.
Addison said some of the concerns raised during the consultation have also been disregarded.
“These Code changes cannot be described as ‘modest’. They are sweeping, disproportionate to legitimate concerns of misconduct, and have left practitioners uncertain, confused and overwhelmed about their new obligations,” he said.
“The Joint Bodies’ stance is that consultation should be undertaken for all significant changes to the law and should have been followed in this case.
“Policy development must involve due process to ensure the new rules are subject to proper consultation and scrutiny, and are fairly implemented without unreasonably disrupting the vast majority of practitioners who overwhelmingly conduct themselves with integrity and honesty.”
