Comments sought on regime's effectiveness in discouraging promotion of tax exploitation schemes
The Albanese government has announced that it is continuing its crackdown on tax adviser misconduct and unethical tax avoidance behaviour through a consultation seeking to review tax promoter penalty laws.
These laws aim to capture tax agents promoting to clients illegal and fraudulent schemes for the reduction of their taxes, said a media release of Australia’s Treasury.
Specifically, the government is inviting interested stakeholders to comment on the following subjects by 1 November:
- the present regime’s effectiveness in tackling and discouraging the promotion of tax exploitation schemes
- the framework’s operation, including whether the existing exemptions act as appropriate safeguards for tax practitioners providing genuine advice
- the ways other existing, comparable regimes have successfully deterred misconduct
This consultation is the fifth of eight reviews led by the Treasury and announced by the government in response to the PwC tax scandal, which exposed loopholes and shortcomings in the tax promoter penalty laws and in the applicable regulatory frameworks, the media release said.
That scandal showed that these laws failed to address the activity of those promoting illegal tax-dodging schemes to multinational corporations, the media release added.
Government response
In an effort to rebuild faith in the structures and systems relevant to Australia’s tax system and capital markets, the government has taken steps to address the scandal’s impacts, including through passing legislation last May that amended the existing regime by increasing the maximum civil penalties for tax exploitation scheme promoters, according to the Treasury’s media release.
This consultation, which builds upon the May legislation, is weighing whether the amended regime aligns with the purpose, sufficiently addresses the current promoter activity types, and effectively protects taxpayers from being drawn into illegal tax exploitation schemes, the media release said.
The government is committed to equipping the Australian Taxation Office with the tools needed to tackle tax exploitation schemes and is committed to addressing the gaps revealed following the PwC tax scandal, the media release added.
