Review of Tax and Corporate Whistleblowing Frameworks in Australia
The Tax Institute welcomes the opportunity to make a submission to the Treasury in respect of its consultation regarding the review of tax and corporate whistleblowing frameworks (Consultation Paper).
The Tax Institute recognises the important role that effective whistleblower protections play in supporting the integrity of Australia's tax, corporate and professional regulatory frameworks. Individuals who become aware of misconduct or unethical conduct should be able to raise concerns through appropriate channels with confidence that they will be protected. We therefore welcome Treasury's review and the opportunity to contribute to the ongoing development of Australia's tax and corporate whistleblowing regimes.
We also acknowledge the Government's recent reforms to the tax whistleblower framework through the Treasury Laws Amendment (Tax Accountability and Fairness) Act 2024 (2024 Act). These amendments expanded the tax whistleblower regime to protect disclosures made to the Tax Practitioners Board (TPB), extended protections for disclosures made to medical practitioners and psychologists and strengthened whistleblower protections more broadly. We welcome these enhancements as an important step in strengthening the integrity of the tax system and the tax profession.
However, despite these improvements we consider that some gaps and uncertainties remain. In particular, consideration should be given to the interaction between the breach reporting obligations under the Tax Agent Services Act 2009 (Cth) (TASA) and the eligibility requirements for protection under the tax whistleblower regime. There may be circumstances where individuals who are required to report misconduct do not have access to corresponding whistleblower protections under the Taxation Administration Act 1953 (Cth).
Consultation timing
We note that the consultation period for this review has coincided with a number of other significant Treasury consultations, including the proposed minimum tax on discretionary trust distributions and the capital gains tax reforms relating to start-up investment. Each of these consultations raises substantial issues for our members, and the overlap has necessarily limited the depth of consultation that we have been able to undertake across all matters. The cumulative effect of concurrent consultations affects the breadth and depth of stakeholder input received across each consultation process.
As a result, this submission focuses on the key issues that we consider warrant further consideration and reform. In particular, we have concentrated on areas where there appear to be gaps, uncertainties or practical issues in the operation of the current framework. Accordingly, our comments do not seek to address every consultation question individually. Rather, this submission focuses on the principal issues that we consider are most important to the continued effectiveness of Australia's tax whistleblower regime.
Given these constraints, we would welcome the opportunity to engage further with Treasury and contribute additional feedback as the review progresses.
Scope of this submission
The Consultation Paper addresses both the tax and corporate whistleblower frameworks. Consistent with The Tax Institute’s role and the expertise of our members, this submission focuses only on the tax whistleblower regime in Part IVD of the Taxation Administration Act 1953 (TAA) and the implications for tax practitioners and their clients.
Our submission does not include comments on the corporate whistleblower regime in Part 9.4AAA of the Corporations Act 2001 (Cth) (Corporations Act).
Summary of key themes and recommendations
The Tax Institute considers that the review provides an opportunity to strengthen and clarify Australia's tax and corporate whistleblower frameworks. In particular, we recommend:
- addressing the gap between the breach reporting obligations under the TASA and access to whistleblower protections under the tax whistleblower regime;
- improving consistency between the tax and corporate whistleblower frameworks, including harmonising key definitions and concepts where appropriate;
- clarifying and, where necessary, expanding the on-disclosure provisions in Part IVD so that a disclosure can be referred to the body with relevant jurisdiction over the conduct disclosed;
- clarifying the extent to which whistleblower protections apply to reasonable preparatory conduct undertaken in connection with making a disclosure;
- introducing a limited exception to the tax secrecy provisions to enable basic procedural feedback to be provided to disclosers without compromising taxpayer confidentiality;
- clarifying the interaction between whistleblower protections and contractual confidentiality obligations, including non-disclosure agreements;
- clarifying the interaction between tax whistleblower protections, legal professional privilege and the professional confidentiality obligations of advisers and practitioners;
- improving awareness of whistleblower rights and protections, including consideration of whistleblower policy requirements in the tax context;
- strengthening practical protections against retaliation and workplace harm where a whistleblower's identity becomes known or can be inferred;
- ensuring that any oversight arrangements adopted in respect of tax whistleblower matters include appropriate tax expertise, a clearly defined relationship with existing tax administration bodies and a central point of guidance for whistleblowers;
- considering a targeted compensation framework for whistleblowers whose disclosures result in verified enforcement outcomes or revenue recovery, while ensuring appropriate safeguards exist to discourage frivolous, vexatious or malicious claims; and
- increasing transparency through the publication of aggregated whistleblower data, outcomes and enforcement activity to improve accountability and public confidence in the regime.
Our detailed responses to the proposals are contained in Appendix A