The Tax Practitioners Board (TPB) needs more funding if it is to regulate more entities, according to accountancy group, CPA Australia.
While a number of financial planners have expressed resentment at the increasing role of the TPB in planning activities, CPA Australia has used its pre-Budget submission to the Treasury to urge a higher level of funding for the body.
In doing so, it has cited the increased work likely to flow from the so-called Black Economy Taskforce.
“If the role of the Tax Practitioners Board (TPB) is to be expanded to take a more active role in monitoring and investigating tax agents that may be facilitating questionable behaviour as has been suggested by the Black Economy Taskforce, it is important that the TPB receive an appropriate and ongoing increase in their funding to enable it to undertake such an expanded role,” the submission said.
“The responsibilities of the TPB and the number of entities it regulates has grown substantially in recent years – yet funding for its operations has not,” the CPA Australia submission said.
It said that while the TPB continued to be an effective regulator, CPA Australia was concerned about whether it could remain as such, which may in turn have other negative consequences for consumers.
“For example, it may impact community trust in both the tax and accounting profession and the tax system more broadly given the key role the tax and accounting profession plays in the community’s compliance with tax laws in a tax system that is based on voluntary compliance,” the CPA Australia submission said.
It said that in requesting a boost to the funding of the TPB, CPA Australia was not advocating for the introduction of a user-pays/cost recovery model of funding for the TPB.
Elsewhere in its submission, CPA Australia questioned the industry funding/user pays model for the Australian Securities and Investments Commission (ASIC), stating it “cannot support the full cost recovery model as proposed and recommend that the government instead explore a partial cost recovery model”.
The submission said this was primarily due to the proposed fees in several areas, especially the application fee for self-managed superannuation fund (SMSF) auditors, were in no way appropriate and that “the proposed fees may have repercussions for those working in, or aspiring to work in those areas, as well as consumer choice”.
“The government has failed to adequately explain the link between ‘the incidence of fees and levies and the cost of regulating the relevant activity’ - a requirement stipulated in the 2014 final report of the Financial System Inquiry (FSI),” the submission said.
“The full cost recovery funding model takes a narrow view regarding those that create the need for regulation, and therefore regulated entities carry a disproportionate cost burden. A well-functioning, efficient capital market that operates with integrity, encourages competition and is accessible to the vast majority of people is a public good and funding of ASIC should reflect this.”