Editorial - regulatory regime for tax agents resurfaces

The Assistant Treasurer, Chris Bowen MP, on 29 May 2008 released for public comment a revised exposure draft package that outlines proposed reforms to the registration and regulation of entities providing tax agent services for a fee. For those who can remember a similar exposure draft was released on 7 May 2007 by the former Assistant Treasurer, Peter Dutton.

The aim of the legislative changes is to improve the framework for the registration and regulation of tax practitioners. No-one questions the need to update the rules that regulate tax agents as the rules in existence today were introduced as far back as 1943. Since that time there have been substantial changes to the tax environment; the most notable being the introduction of the self-assessment system which has shifted the burden of complying with the tax laws onto taxpayers.

We lobbied hard on last year's exposure draft as it contained proposals far too onerous on tax agents. Taxpayers Australia came to the conclusion that while we were supportive of the need to update the current regime and improve standards, the proposed legislative framework failed the fairness test in achieving its worthwhile objectives. We were of the opinion that the proposed regime shifted a significant burden under self-assessment from the taxpayer on to the shoulders of the tax agent. Our submission called for the May 2007 exposure draft not to proceed in its proposed form and to undergo more consultation to iron out the major concerns identified.

Our efforts did result in the exposure draft being subject to further consultation. In October 2007 we were given an opportunity to express our concerns which in part have now been reflected in a much improved version of the proposed regulatory framework. The May 2008 version of the revised exposure draft improves the balance between what is required to raise standards, what the profession can deliver and what the customer is prepared to pay. While it is encouraging to see significant progress there are still some remaining issues that will hopefully get resolved in this final consultative phase.

The exposure draft and associated regulations have been amended in a number of respects. The key amendments are outlined on page 376.

It is disappointing that the window of opportunity for written comments on the revised exposure draft end on 27 June 2008. Given that the tax profession has waited since 1998 for these reform measures to eventuate it seems ironic that the submission period is so short - only four weeks. A cynic may think this might be the Federal Treasury's way of saying that they have progressed consultation far enough and it's now time to progress the reforms into legislation.