The Australian Government has announced a package of reforms to crack down on tax adviser misconduct exposed by the PwC scandal.

The package of reforms covers three priority areas:

  1. Strengthening the integrity of the tax system
  2. Increasing the powers of our regulators
  3. Strengthening regulatory arrangements to ensure they are fit for purpose

“The PwC scandal exposed severe shortcomings in our regulatory frameworks that were largely ignored by the Coalition, and today we’re taking significant steps to clean up the mess,” said Treasurer Jim Chalmers, Finance Minister Katy Gallagher, Attorney General Mark Dreyfus and Assistant Treasurer Stephen Jones in a joint statement.

“We’re cracking down on misconduct to rebuild people’s faith in the systems and structures that keep our tax system and capital markets strong.”

“We’re also cracking down on the scourge of multinational tax avoidance and making sure multinationals pay their fair share of tax in Australia.”

“By increasing penalties, giving regulators stronger teeth to investigate and prosecute perpetrators and boosting transparency, collaboration and coordination within government, we are acting to restore public confidence and help prevent this from happening again.”

Legislation to strengthen the integrity of our tax system and increase the powers of regulators will be introduced this year, with consultation on the reforms beginning shortly.

Strengthening the integrity of the tax system

The government will:

  • Increase maximum penalties for advisers and firms who promote tax exploitation schemes from $7.8 million to over $780 million;
  • Expand tax promoter penalty laws so they’re easier for the ATO to apply to advisers and firms who promote tax avoidance;
  • Increase the time limit for the ATO to bring Federal Court proceedings on promoter penalties from four years to six years after the conduct occurred.

Increasing the power of our regulators

The government will:

  • Remove limitations in the tax secrecy laws that were a barrier to regulators acting in response to PwC’s breach of confidence;
  • Enable the ATO and Tax Practitioners Board to refer ethical misconduct by advisers (including but not limited to confidentiality breaches) to professional associations for disciplinary action;
  • Protect whistleblowers when they provide the Tax Practitioners Board with evidence of tax agent misconduct;
  • Give the Tax Practitioners Board more time – up to 24 months – to complete complex investigations;
  • Improve the Tax Practitioners Board’s public register of practitioners, so that people have more transparency over agent and firm misconduct.

Strengthening our regulatory arrangements

This work will include:

  • Implementing remaining recommendations from the independent review of the TPB, including strengthening the range of sanctions available to the TPB;
  • A Treasury review of the promoter penalty laws to ensure they address the types of promoter activity prevalent today, including schemes that are bespoke, complex, and/or operate across jurisdictional boundaries;
  • A Treasury review of emerging fraud and threats to clamp down on systemic abuse of our tax system perpetrated by tax agents and other bad actors;
  • A Treasury and Attorney‑General’s Department joint review of the use of legal professional privilege in Commonwealth investigations, with options for Government to respond to concerns that some claims of privilege are being used to obstruct or frustrate investigations;
  • A Treasury examination of the regulation of consulting, accounting and auditing firms to consider whether reforms are needed. This work will require collaboration with states and territories, given cross‑jurisdictional regulation of partnerships, as well as engagement with ongoing Parliamentary committee inquiries;
  • A Treasury review of the compulsory information gathering powers of the ATO to ensure it has the right tools to perform its role effectively and enable it to assist law enforcement agencies to investigate serious criminal offences perpetrated against the tax and superannuation systems;
  • A Treasury review of the secrecy provisions that apply to the ATO and Tax Practitioner Board to consider whether there are further circumstances in which it is in the broad public interest for information obtained by these regulators to be shared with other regulatory agencies;
  • A Department of Finance review into the use of confidentiality arrangements across all Government agencies to ensure they are fit for purpose, legally binding and enforceable. The review will also identify opportunities to strengthen the management of conflicts of interest in contracts;
  • A Department of Finance review to explore options to increase the transparency and visibility of where Commonwealth contracts have been terminated for material breach.


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