A significant pathway to tax practitioner registration should be closed, the Treasury argues, rattling the accounting sector and causing concern among professional associations like CPA Australia.
Treasury unveiled its latest consultation on Wednesday, seeking stakeholder views on how to strengthen registration rules under the Tax Practitioners Board (TPB), the body that regulates Australian tax and BAS agents.
The consultation paper arrives after a review of the TPB, carried out in the wake of the PwC scandal.
It reflects the “importance of addressing gaps and strengthening the integrity of the tax system,” and proposes several ways to ensure tax practitioners operate legally and ethically.
One key proposal is changing the way would-be tax agents gain TPB registration.
Under the current scheme, individuals may achieve TPB registration by showing academic qualifications in accounting, a degree in law (provided it covers tax law and basic accounting principles), or extensive relevant experience.
Tax agent registration can also be achieved by becoming a voting member of a recognised professional association (RPA) like CPA Australia, the Institute of Certified Bookkeepers, and IPA Australia.
Membership involves the completion of industry-specific learning modules, and real-world experience relevant to accounting and finance.
But that specialised registration pathway should be closed, Treasury argues.
Doing so would “strengthen the existing registration regime by increasing the minimum education requirements for individuals to become tax agents,” the consultation paper states.
Treasury argues that tax agents currently registered under this pathway do not necessarily need to hold a degree or diploma qualification, and may not have achieved TPB-approved courses in Australian taxation law, commercial law, and basic accountancy principles.
Tax practitioners registered under the RPA method would be grandfathered into the new system, the Treasury states, but new entrants would need to find an alternative pathway to registration.
Closing that particular door would not inhibit entrants either, according to the paper.
It believes the bulk of would-be tax practitioners eligible for registration under the RPA pathway would “likely be eligible for registration through alternative pathways and thus removal of this pathway will not be a significant barrier to entry or remaining registered”.
CPA Australia, which counts over 170,000 members across the Asia-Pacific region, is one of the RPAs in the crosshairs of that Treasury proposal.
In a statement provided to SmartCompany, Ram Subramanian, CPA Australia’s interim head of policy and advocacy, said it does not support the move to close the professional association accreditation and registration pathway.
“RPAs ensure a clear pathway for ethical professionals and ensure the smooth interaction of accounting professionals with the regulatory environment,” he said.
While Treasury notes the importance of RPAs to help ‘co-regulate’ the sector, Subramanian said closing the pathway could diminish their role.
“We are concerned that if professional associations are no longer accredited by the TPB, the inherent benchmarks established by the accredited associations, as to education standards, professional experience and behaviour, imputed to the registered member will be diluted,” he said.
Talented and responsible tax professionals with non-standard professional backgrounds could also lose out, he added.
“The potential consequences, unintended or otherwise, of removing the professional membership pathway must be comprehensively considered,” Subramanian said.
“Many highly skilled practitioners utilise the professional membership pathway, including overseas talent and those who have joined the profession via non-conventional routes.”
The RPA consultation is open for comment until Thursday, August 7.
It is just the latest shake-up to the professional accounting space, after a new legislative instrument established eight new obligations for practitioners under the Tax Agent Services’ Code of Professional Conduct.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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