Government ‘bundling’ wider tax industry with PwC scandal, says IPA
The government is tainting perceptions of the broader tax practitioner community by directly linking its reform measures with the PwC tax leaks scandal, the IPA has said.
The Institute of Public Accountants has criticised the government's reference to the PwC incident in the various sets of reform measures it has released in a recent submission.
The professional body noted that the government's recent consultation on the eligibility requirements for tax practitioners again refers to regulatory gaps "exposed as a result of the PwC scandal".
"The direct linkage of these measures to the progress of ‘Government’s comprehensive response to the PwC tax leaks scandal’ is inappropriate as there have not been any systemic failures of standards in the broader tax practitioner community," said IPA general manager, technical policy, Tony Greco.
"We should not be bundled with revelations of professional misconduct by a small number of large firms which is tainting perceptions that these issues are widespread."
Greco noted that while some of the reform proposals in the consultation paper emanate from the 2019 review, the proposals have been given extra weight to address perceived shortcomings in the regulatory framework.
"The PWC incident did expose some regulatory gaps which will be specifically addressed by a separate review, examining the regulation of consulting, accounting and audit firms," he said.
"The James review is now over five years old and some of the recommendations need to be re-assessed given the changing regulatory environment since the review."
The professional body has also raised concerns about the extensive number of matters released for consultation in a short period.
"We question the rushed nature of consultation on the extensive number of matters included in the consultation Paper," the IPA said.
Greco said the profession has yet to adapt to breach reporting and is also grappling with eight new code obligations that were introduced by the assistant treasurer in a legislative instrument.
"The Joint Professional Bodies have been requested and held urgent discussions with the Minister’s office and Treasury regarding this legislative instrument," he said.
"So far, the outcome of these discussions has not addressed or alleviated our concerns, despite the announcement by the Minister on 1 August 2024 to insert a transitional rule into the determination that will provide firms with more time to bring themselves into compliance with these new obligations.
"The Federal Government’s Best Practice Consultation guidance note states that consultations by government should not be rushed, and agencies should provide realistic timeframes for participants to contribute," said Greco.
The submission noted that the time frame for the consultation regarding eligibility requirements for tax practitioners' registration was well below the minimum time frame acceptable. Treasury agreed to extend the submission deadline to 15 August last week following concerns about the timeframe for consultation.
"This TPB registration review in particular raises significant issues, limiting the time for organisations to contribute, reduces the effectiveness of consultation increasing the risk of poor policy outcomes, and unintended consequences," the IPA said.
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