4 March 2025
Extending secrecy exceptions risks damaging integrity of our tax system
- CPA Australia urges Treasury to reconsider plans to extend tax secrecy exceptions.
- Individuals and businesses face unfair reputational damage if personal information is shared without good cause.
- Trust and confidence are fundamental to maintaining a fair and transparent tax system.
The federal government’s proposal to extend tax regulator secrecy exceptions risks permanently damaging the integrity of Australia’s tax system, says CPA Australia.
Treasury believes there are circumstances where it would be in the public interest for information obtained by the Australian Taxation Office (ATO) or the Tax Practitioners Board (TPB) to be shared with other bodies or agencies in an attempt to prevent and investigate allegations of fraud and other misconduct.
However, confidentiality of protected information is integral to maintaining taxpayer confidence to openly engage with regulators in the first place, says CPA Australia’s Regulations and Standards Lead, Belinda Zohrab-McConnell.
“While we support the sharing of appropriate information to help protect the integrity of the regulatory framework for tax practitioners and broader system in which they operate, we believe the threshold being proposed by Treasury, set at a ‘reasonable suspicion’, is too low,” she said.
“As proposed, individuals suspected of misconduct would see their personal information shared with other agencies, which could ultimately lead to unfair reputational damage if they are found to have done nothing wrong.
“In addition, smaller agencies do not have the same robust architecture to prevent data leaks, nor do they demand the same standards of confidentiality as the ATO.
“It’s vital that taxpayers have confidence in the system in which they place so much trust. The honest exchange of personal information is fundamental to upholding a fair and transparent tax system. Any loss of confidence acts to undermine public trust in the integrity of the tax system.
“Not only might individuals and businesses be more reluctant to share the personal information they previously trusted to the ATO and TPB, but this may extend to the sharing of information with their tax advisers on whom businesses and individuals rely for their tax compliance.”
Concern regarding the impact of the ATO and TPB sharing personal information with other agencies is not new. In its consultation on the Explanatory Memorandum to the Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill in 2010, Treasury stated that: “Compliance with taxation laws could be adversely affected if taxpayers thought that their information could be readily disclosed.”
It added that: “As a guide for future policy consideration, the disclosure of taxpayer information should be permitted only where the public benefit associated with the disclosure clearly outweighs the need for taxpayer privacy.”
In a joint submission to Treasury with the other accounting bodies, CPA Australia makes its case that the proposals set out in the consultation paper may already be covered by the existing ability of the ATO to share information, including information about fraud, provided it is for the general administration of the tax laws.
In addition, the accounting bodies do not support the granting of delegated powers by which the Minister can make subordinate legislation to extend the secrecy exceptions without due parliamentary process.
CPA Australia calls on the ATO and the TPB to fully consider the existing exceptions to the secrecy provisions before looking for those exceptions to be extended.
About us:
About CPA Australia
CPA Australia is Australia’s leading professional accounting body and one of the largest in the world. We have more than 174,000 members in over 100 countries and regions. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
Contact details:
Simon Downes, External Affairs Lead, [email protected] or 0401 461 503
