Firms and advisers promoting tax exploitation schemes will face hundreds of millions of dollars in penalties as part of what the federal government is calling the biggest crackdown on tax adviser misconduct in Australian history.
Key points:
- The PwC tax leak scandal has prompted the government to crackdown on tax adviser misconduct
- Penalties for the promotion of tax exploitation schemes will be increased by more than 100 times current levels
- The government says the changes will give regulators stronger teeth to investigate and prosecute perpetrators
The reforms have been announced in the wake of the PwC tax leak scandal, which the government said "exposed severe shortcomings" in the country's financial systems.
Advisers and firms who promote tax exploitation schemes will now face maximum penalties of over $780 million, more than 100 times the current level of $7.8 million.
"We're cracking down on misconduct to rebuild people's faith in the systems and structures that keep our tax system and capital markets strong," Treasurer Jim Chalmers said in a joint statement with the finance minister, attorney-general and assistant treasurer.
"Tax agents and others who advise their clients to avoid Australia's tax laws must be penalised.
"Bigger penalties will reduce incentives to use confidential government information to help clients avoid tax."
Under the reforms, the time limit for the Australian Taxation Office to take firms to court over suspected misconduct will increase from four to six years after the conduct occurred.
The power of regulators will also be bolstered through the removal of limitations in tax secrecy laws, which were a barrier to regulators acting in response to the PwC breach.
Whistleblowers who provide evidence of misconduct will be given more protections, while the Tax Practitioners Board will be given more time to complete complex investigations.
"By increasing penalties, giving regulators stronger teeth to investigate and prosecute perpetrators and boosting transparency, collaboration and coordination within government, we are acting to restore public confidence and help prevent this from happening again," the joint statement said.
The government said the PwC scandal has raised questions "about the adequacy of regulations applying to large consulting, accounting and auditing firms and how this misconduct was able to occur and go undetected without consequence for so long."
As a result, the Treasury department will conduct a two-year whole-of-government response to the PwC matter in an attempt to address the systemic issues raised.
Labor senator Deborah O'Neill, who sits on the parliamentary committee that described the actions of PwC as "a calculated breach of trust", said it was a "comprehensive" set of reforms.
"Old ways of doing business belong to a very dark past," she said.
"This sector has to operate effectively for the integrity of the financial markets. What we do needs to be sound, it needs to be careful but it needs also to be prompt.
"The message couldn't be clearer; today's package is a fabulous way to indicate to Australians that they should have hope that the problems that have been documented will now be resolved."
https://news.google.com/rss/articles/CBMiWmh0dHBzOi8vd3d3LmFiYy5uZXQuYXUvbmV3cy8yMDIzLTA4LTA2L3B3Yy10YXgtc2NhbmRhbC1wcm9tcHRzLWdvdmVybm1lbnQtcmVmb3JtLzEwMjY5NTE0MtIBKGh0dHBzOi8vYW1wLmFiYy5uZXQuYXUvYXJ0aWNsZS8xMDI2OTUxNDI?oc=5
2023-08-06 07:36:03Z
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