Tax Practitioners Board sanctions reforms
The Tax Institute welcomes the opportunity to make a submission to the Treasury in relation to the consultation on:
- the draft regulations and explanatory statement supporting the publication of sanctions on the Tax Practitioners Board (TPB) public register; and
- the draft determination and explanatory statement requiring tax practitioners to notify clients of specified conduct matters.
We support the Government's objective of strengthening confidence in the tax profession, improving consumer protection and ensuring that taxpayers have access to relevant information when selecting and engaging tax practitioners. We also support the objective of providing the TPB with an appropriately graduated sanctions framework that promotes compliance with professional standards.
Transparency measures that involve public disclosure of sanctions and mandatory client notifications must be carefully calibrated. Such measures can have significant and lasting reputational consequences for practitioners, and may affect their ability to continue operating long after any formal sanction has ceased.
Consistent with our concerns previously raised in our 27 April 2026 submission (April 2026 submission) on the exposure draft TPB sanctions legislation, we consider that procedural fairness, proportionality, and the availability of appropriate safeguards remain crucial considerations in the design of these reforms. Public disclosure can be an important regulatory tool, but it should not operate in a manner that effectively imposes additional penalties beyond those intended by Parliament.
We are also concerned that the publication regime and client notification requirements may, in some circumstances, result in adverse reputational consequences before review rights are exhausted or before a matter has been finally determined.
Consultation timeframe
We are concerned that the consultation period for the draft regulations and draft determination is 10 business days, which does not provide stakeholders with sufficient opportunity to properly consider the proposals and develop informed responses. The exposure draft regulations and draft determination also need to be considered in conjunction with the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026 (the Bill) currently before Parliament. The exposure draft of that Bill was itself subject to a very limited consultation period of approximately two weeks (13 to 24 April 2026).
This consultation follows immediately after Treasury's consultation on the proposed minimum tax on discretionary trusts, which closed on 31 July 2026, and coincides with consultation on the CGT and Negative Gearing Tranche 2 legislation, which opened on 4 August 2026 with submissions due by 21 August 2026. Treasury is also undertaking targeted consultation on aspects of the Tranche 2 measures and other significant reforms. Many of these consultations involve the same stakeholders, advisers and representative bodies.
In these circumstances, it is difficult for stakeholders to provide properly considered and comprehensive feedback across multiple complex consultations within such compressed and overlapping timeframes. Meaningful consultation requires sufficient time to analyse proposals, assess practical implications, engage with members and formulate recommendations.
Against this background, our submission focuses on those aspects of the draft regulations and draft determination that we consider raise the most significant policy, administrative, and procedural issues. We encourage Treasury to continue engaging with stakeholders as these reforms progress and we intend to provide further comments should additional issues emerge.
This submission should be read in conjunction with the April 2026 submission. The concerns and recommendations expressed in that submission remain relevant to the supporting regulations and determination and should be considered as part of Treasury's assessment of the reforms as a whole.
Summary of key issues and recommendations
General issues (applicable to both instruments)
- Preliminary comments and the graduated sanctions framework
The consultation materials provide limited guidance on how the TPB's expanded range of sanctions will operate as an escalating and proportionate compliance framework. Treasury and the TPB should provide further guidance on the intended application of these powers and the circumstances in which particular sanctions may be used.
Issues on the draft Determination
- Interim suspensions – client notification obligations (section 45)
Interim suspensions are intended to be precautionary measures rather than final findings of misconduct, but the client notification requirements in section 45 may amplify their practical consequences. Treasury should ensure these requirements remain proportionate and consistent with the temporary nature of interim suspensions. Our support for these requirements is conditional on the interim suspension threshold in the Bill being amended to require both a serious and an immediate risk of harm.
Issues on the draft Regulation
- Interim suspensions – publication on the TPB Register (section 25EB)
Publication of an interim suspension on the TPB Register may cause reputational consequences that are disproportionate to its precautionary nature. Where interim suspension information is published, the TPB should also publish the final outcome of the matter to provide a complete and balanced record. As above, our support is conditional on the interim suspension threshold in the Bill being amended accordingly.
- Enforceable undertakings – publication on the TPB Register (section 25JD)
An enforceable undertaking is a cooperative compliance mechanism and does not involve a formal finding of misconduct. Treasury should reconsider whether, and in what circumstances, publication of an enforceable undertaking on the Register is warranted.
- Institution of criminal proceedings – publication of alleged conduct (section 25JA)
The Register must publish details of conduct alleged to constitute a criminal offence once proceedings are instituted, without any TPB threshold assessment, and this remains published for as long as the proceedings continue. This information should be clearly qualified as unproven while the matter is on foot.
- Correction and removal of information from the Register
It is unclear how a Register entry is corrected or removed where the underlying decision is varied, overturned or set aside on review or appeal. Treasury should clarify this process and ensure publication periods are proportionate.
Our detailed comments and recommendations are contained in Appendix A.