House of Representatives

Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill 2009

Second Reading Speech

Dr Emerson (Minister for Small Business, Independent Contractors and the Service Economy, Minister Assisting the Finance Minister on Deregulation and Minister for Competition Policy and Consumer Affairs)

I move:

That this bill be now read a second time.

This bill, the Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill, will facilitate a smooth transition from the current law concerning the registration of tax agents to the new regulatory regime provided in the Tax Agent Services Act 2009.

The Tax Agent Services Act 2009 was passed both houses of Parliament earlier this year and received Royal Assent on 26 March 2009. That act will ensure that tax agent services are provided to the public in accordance with appropriate professional and ethical standards.

This bill provides the transitional and consequential amendments required to ensure a smooth transition to the new regulatory regime.

The bill consists of a number of key elements.

Firstly, the bill ensures that entities currently providing tax agent services are able to transition into the new regime with as little disruption as possible. This includes tax agents and nominees registered under the current law, as well entities currently providing business activity statement (BAS) services. The bill also includes special transitional provisions to cater for entities providing specialist tax agent services.

Secondly, the bill will amend the Taxation Administration Act 1953 to introduce two 'safe harbour' provisions. These provisions exempt taxpayers who engage an agent from liability for administrative penalties for mistakes and omissions made by their agent, in certain circumstances. These safe harbours have been a key feature of the new regime since it was first proposed in 1998. They reflect the fact that under the new regime, effective action will be able to be taken to improve the performance of tax agents or BAS agents where necessary.

Thirdly, the bill makes minor amendments to the Tax Agent Services Act 2009 to, among other things, facilitate certain disclosures of information from the new Tax Practitioners Board, established under that act, to the Commissioner of Taxation.

Lastly, the bill will make consequential amendments to other existing legislation. These amendments will be necessary upon the commencement of the key regulatory provisions in the Tax Agent Services Act 2009. For example, the bill repeals part VIIA of the Income Tax Assessment Act 1936, which is the existing law relating to the registration of tax agents.

The new regulatory regime has undergone significant development and refinement over a number of years. The key transitional and consequential amendments, including the proposed safe harbour provisions, have been the subject of extensive consultation. Indeed, this bill was publicly released for six weeks public consultation earlier this year.

The government values the input provided by interested parties through consultation. Comments received during consultation have led to significant improvements being made to achieve what is provided in this bill today.

The full details of the provisions in the Tax Agent Services (Transitional Provisions and Consequential Amendments) Bill are contained in the explanatory memorandum.

I commend the bill and present the explanatory memorandum.

Debate (on motion by Mr Pearce) adjourned.