Which new national regime for the regulation

Which Professions are affected?

 

It is
well-known, that any taxpayer in Australia continually and extensively use
services offered by tax practitioners. Indeed, in 2011–12, tax practitioners submitted
around 65 per cent of individual income tax returns and over 85 per cent of
business tax returns. Therefore, an effective regulation of tax practitioners as
well as constant improvement of services they provide is a critical element of
Australia’s taxation regime. As a result, in 2010 the Tax Agent Services Act
2009 (TAS Act) has established a new national regime for the regulation of
tax professionals. This regime influences to all professionals who provide tax
agent services and includes Business Activity Statement (BAS) agents as well as
tax service providers. The TAS Act also established the Tax Practitioners Board
(TPB), an independent statutory authority that is responsible for the new
regulatory regime. The primary purpose of the establishment of the Tax Agent
Services Act (TASA) and the TPB was to regulate professionals who prepare
returns of income required to be filed for taxpayers.

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TAS Act and
TPB affects professionals, who provide tax services for fee or for an award in a
various ways. For example, from educational point of view, before providing tax
services, a professional should go through a fit and proper person test23, have
prescribed qualifications and experience requirements. Another example, professionals
who provide tax services have to register through TPB. Registration is not an
easy task though, first of all tax practitioners should be complied with the
law, need to have referrals and as mentioned before have all the required
qualifications. Interestingly, BAS agents will not be required to demonstrate
the same degree of formal education and relevant experience as tax agents.

Significant to mention, that TAS Act and TPB affects not only tax practitioners
but other professions as well but in a indirect way. Indeed, due to recent
development of technologies and cloud computing, software engineers developing
software programs providing tax services should be complied with the TAS Act
and have a registration through the TBP.

All in all,
from the above, it could be clear that tax practitioners such a tax agents, BAS
agents, some of the accountants who has qualifications and etc. are regulated
strictly through TAS Act and TPB in many ways.

Code of conduct

Apart from
regulating tax practitioners discussed in a previous part, a number of studies
have examined tax practitioners’ ethical behaviour and the implications for tax
compliance as well (Marshall et al, 1998, Marshall et al, 2010, Erard, 1993,
Bobeck et al, 2010, Tan 2011 and Molero and Pujol, 2012). As a result, governing
ethical and professional standards of professionals who provide tax services is
critical for Australia’s taxation regime. Therefore, the Code of Professional
Conduct (Code) set out in Part 3 of the TAS 2009, which governs the ethical and
professional standards, or in other words personal and professional conduct of
a registered tax agent or BAS agent (see s 30-1 of the TASA 2009). The
objective of the Code is to provide consumer
protection and assurance that practitioners are meeting appropriate standards
of competence, and professional and ethical conduct.

The Code has a statement
of principles and the TBA may issue binding written guidelines for the
interpretation and application of the Code For the sake of
thoroughness, these principles are set out in full in the Appendix to this
article
(appendix 2). However, if the Board investigates and finds that a registered
tax agent or BAS agent has failed to comply with the Code, the Board may give a
written caution, order the registered tax agent or BAS agent to take specified
actions, or suspend or terminate their registration. There are also legal obligations of the Code are in addition to any
professional and ethical requirements that may be imposed on registered tax
practitioners through their membership of a professional body.

In
conclusion, from the above, it could be concluded that the Code of Professional Conduct (the Code) grounds mandatory
requirements for the professional and ethical conduct of registered tax
practitioners, including the duties such practitioners owe to their clients and
the regulator. It is aimed at setting out the appropriate ethical and
professional standards expected of all tax practitioners, including those that
are not members of a professional association.

 

 

 

 

 

 

 

 

 

Introduction

Taxpayers employ professional tax practitioners to
represent them for a number of reasons. The main reasons include, a desire to lodge
accurate returns mainly due to their lack of tax knowledge because of complexity
of the current tax law, a desire to minimize the tax they are required to pay,
their fear of making a mistake and being penalised, or just having a lack of
time to complete their own return. From here, it is inevitable to point out
that the relationship between taxpayers and tax practitioners should be
regulated thoroughly in order to avoid any negative consequences. As a result,
the relationship between taxpayers and the tax practitioners has been changed
in Australia trough the establishment of the Tax Agent Services Act 2009 (TASA).

In
this report, a broad definition is adopted of the term “tax practitioners”
which refereed to all professionals who provide tax services for a fee or for an
award, including BAS agents. For example, tax agents, tax agent franchises, tax
accountants, tax lawyers and legal practitioners in a tax area. 

 The main
purpose of this report is to investigate the role and
effectiveness of the Tax Practitioners Board (TPB), which was established by
TAS, on the tax agent services industry.

The
research report firstly starts with the analysis of the reason the Tax Agent
Services Act 2009 (TASA) was enacted and what is tax agent service means
itself. Then it goes to explore on how TASA regulates or influences all how
professionals in this industry. Lastly, it describes how tax practitioners are
also regulated through the Code of Conduct, which become operational since 1st
of March 2010, and conducting a point of view on describing the most
significant obligation under the Code.

Finally, a summary of the main findings, tax policy
implications, the limitations and suggestions for future research are given in
the conclusion.