In its submission to Treasury on the Review of eligibility requirements for registration with the Tax Practitioners Board consultation paper, the SMSFA said many of the proposals could have a significant regulatory and cost impact on both current and prospective tax practitioners.
“They do not clearly demonstrate the public policy problem that necessitates reform. They also fail to clearly articulate their objectives and lack consideration for other interrelated issues and measures,” it stated.
“We are also unsure why regulation appears to be the default option, without considering what other non-regulatory options may also be effective, such as new or updated guidance from the regulator, being the Tax Practitioners Board (TPB).”
The association stated that it is most concerned about the “truncated timeline” for the consultation, which has allowed only 22 days to consider an extensive range of complex policy reforms.
“We therefore urge Treasury to further engage and consult with stakeholders on the matters raised in the consultation paper before the government considers any regulatory reform. This will be essential in ensuring that any changes considered are effective in addressing identified problems and avoid the risk of unintended consequences,” it continued.
Furthermore, the SMSFA said it was “deeply concerned” about the impact the proposals will have on the future pipeline of the tax profession, particularly given the current pace of regulatory change affecting tax practitioners.
“This includes not only the TPB program of reforms but also other measures such as tranche 2 of the AML/CTF regime. Any implementation must be orderly and staged,” it stated.
“The current environment of multiple, cascading, and significant regulatory changes places the regulator in an untenable position, sees measures operative well in advance of essential guidance materials, and practitioners feeling overwhelmed.”
It continued that another concerning trend is the introduction of prescriptive requirements, such as the quality management system requirement, the disqualified entity provisions, and keeping proper client records as ethical obligations under the code.
“These requirements are not ethical principles or obligations, but rather practice management requirements that can help support compliance with ethical obligations,” it stated.
“Consequently, we believe they should form part of the ongoing registration requirements such as maintaining professional indemnity insurance or meeting the continuing professional education requirements, rather than being specifically prescribed in the Code.”
