With the law now in place to ensure financial advisers are subject to the Tax Agent Services Act, this week, The Tax Institute continued our strong advocacy to ensure that financial advisers have sufficient experience and educational qualifications in tax such that the true intent of the law is fully realised.
We have just lodged a submission to the Treasury on these matters.
In the interests of ensuring a professional and ethical framework is laid out for those financial advisers who wish to register as ‘tax (financial) advisers’ under the new law, they must meet extensive educational qualifications and sufficient relevant experience. We are broadly of the view that the more education and experience that will be required of someone who wishes to register under the Tax Agent Services Act, the better for both the protection of consumers of tax advice and the integrity of the profession.
A financial adviser must have the appropriate skills and experience to perform the function for which they are registered; in this case, the giving of ‘tax (financial) advice’ as defined in the new law.
We are concerned that the education standards and experience requirements are set quite low. This may put at risk consumer protection. It is preferable if the entry requirements to registration are shored up to ensure that the bulk of registrants will have the requisite qualifications to provide tax advice to a competent standard. This will provide consumers with comfort that registered ‘tax (financial) advisers’ have the required skill set to provide them with the advice they need in the majority of cases.
Accordingly, we recommend the Government consider conducting a post-implementation review of these requirements 12 months after their commencement with a particular focus on the quality of advice being provided to ensure the appropriate level of consumer protection is being met.
Self-education expenses cap
We are also continuing our strong advocacy against the Government’s decision to cap self-education expense deductions at $2,000 per year. We are currently finalising our submission to Treasury and yesterday we issued a media release decrying the changes. We also wrote an opinion piece that has been published on AFR.com: ‘Tax hike on learning earns Government the dunce’s cap’.
The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.