Laws to Protect Tax Whistleblowing in Australia: What Does This Mean for Taxpayers and the Taxation Profession?

The Australian Government is keen to explore the development of statutory laws to protect whistleblowers in the taxation environment. The government has asked for submissions on their consultation paper - Review of Tax and Corporate Whistleblower Protections in Australia - released 20 December 2016. The Corporations Act 2001 (Cth) already has comprehensive provisions designed to protect whistleblowers that disclose breaches of the Act to the Australian Securities and Investment Commission. However, the government anticipates that the proposed law would provide protection to whistleblowers that report breaches of the taxation law to the Australian Taxation Office. While it might be good for the government to institute laws that protect whistleblowers, what about the rights of the taxpayer and the tax professional? This article examines the objectives of the government in introducing tax whistleblower laws and the existing whistleblower laws in Australia. It discusses the fiduciary duties of the tax adviser and the importance of legal professional privilege in protecting the rights of the taxpayer. It would appear there is a potential conflict between the desire of the government to collect taxation revenue and the common law duty to maintain the confidentiality of a taxpayer's information. The article critically examines the implications of this government initiative for both the tax profession and the taxpayer.