Tax Practitioners Board sanctions reforms – draft legislation
The Tax Institute welcomes the opportunity to make a submission to the Treasury in respect of its consultation on the:
- exposure draft Treasury Laws Amendment Bill 2026: Enhancing Tax Practitioners Board (TPB) sanctions framework (draft Bill); and
- accompanying explanatory memorandum (draft EM).
In developing this submission, we have closely consulted with our National Technical Committees to prepare a considered response that represents the views of The Tax Institute’s broader membership.
Consultation timeframe
We are concerned that the two-week consultation window for these changes does not provide sufficient time for stakeholders to properly analyse the proposals, assess their practical impacts, or engage meaningfully with the reform process – particularly in the present case, where the proposed sanctions framework includes significant new penalties and expands TPB's powers. Our concerns are exacerbated by the overlap of two other Treasury consultations, each contemplating significant changes to the tax system, and each with equally short consultation periods.
Stakeholders within the tax profession require adequate time to understand the practical and operational implications of multiple reform proposals, which may involve obtaining feedback from members, before finalising positions and making informed recommendations. Rushed consultation processes reduce their effectiveness, increase the risk of poor policy outcomes and unintended consequences, and undermine public confidence in the tax system.
The Office of Impact Analysis states in its March 2023 Australian Government Guide to Policy Impact Analysis report (OIA Report) that when detailed information is provided as part of a consultation, stakeholders require sufficient time to understand, consider and respond, and that consultation periods should not be less than 30 days, and may be as much as 60 days depending on complexity. The OIA Report further notes that, where proposals are large or sensitive, additional time may be required to allow responses to progress through boards or other governance frameworks.
We encourage Treasury to consider the OIA Report when planning future consultations to ensure stakeholders can effectively contribute to and support the Government in designing and implementing changes to the tax system for the benefit of all Australians and our economy.
Summary of key concerns
The Tax Institute supports the objective of strengthening the integrity of the tax system and ensuring the TPB has effective tools to address serious and egregious misconduct and a range of sanctions to respond to other kinds of misconduct. We welcome the implementation of the 2019 Independent Review of the Tax Practitioners Board (James Review) recommendation that the TPB be provided with a broader range of sanctions.
Effective regulation requires a balance of appropriate enforcement tools and well-designed safeguards that promote fairness, accountability and trust in the tax system and the profession.
The ability of the TPB to issue infringement notices, engage in enforceable voluntary undertakings, and suspend tax practitioners will help ensure that the TPB can apply proportionate and appropriate sanctions. The availability of criminal sanctions and an additional civil penalties for unregistered providers of tax agent services in general is also a positive step to ensuring greater consumer protection.
However, we have some concerns about the design of the proposed sanctions framework, particularly the expansion of powers without adequate safeguards. As drafted, certain elements of the framework risk undermining procedural fairness and public confidence, yielding outcomes inconsistent with the reforms' stated objectives.
Our submission focuses on how the proposed framework could be refined to better achieve these outcomes.
In particular, we have the following key concerns:
- interim suspension powers are too broad and lack appropriate safeguards;
- the legislative threshold for interim suspension does not reflect the seriousness described in the explanatory material;
- procedural fairness, including natural justice and early review rights, are unduly limited despite severe and potentially irreversible consequences of proposed sanctions;
- the civil and criminal penalty regimes raise concerns about proportionality and fairness;
- legal practitioners, unregistered employees and in-house personnel could face unintended exposure under the unregistered conduct provisions;
- criminal sanctions for unregistered conduct are insufficiently targeted and may apply as a first resort rather than a last resort; and
- the framework relies too heavily on regulatory discretion rather than embedded legislative safeguards.
Our detailed observations and recommendations to improve the policy design of the sanctions framework are contained in Appendix A.