Senate Committee Criticizes PwC Australia for Lack of Cooperation in Tax Leaks Inquiry

PwC Australia has been uncooperative with a government inquiry into its tax leaks scandal, aiming to “protect the organisation from further scrutiny,” concluded the Senate committee's final report on June 12. The Australian Senate’s Finance and Public Administration References Committee concluded its year-long inquiry by reinforcing its demands for PwC Australia to disclose more information about the partners involved in the tax leak saga both domestically and internationally.

A March report had already criticized PwC Australia for withholding a report it commissioned regarding the international aspects of the tax leaks scandal. PwC has chosen not to provide a full copy of the review, produced by law firm Linklaters, to Australian authorities, including the Senate.

“While the committee does not feel the need to repeat all that has gone before in those reports, we remain concerned that the committee's core recommendation has not been reflected in the actions of PwC,” stated the committee’s report. “In particular, the failure to release the now infamous Linklaters advice which relates to the international elements of this matter, leaving the committee little option but to conclude that the failure to release this material is to protect the organisation from further scrutiny and [the] consequences of their actions.”

The committee also expressed concerns based on evidence from the Australian professional regulator, the Tax Practitioners’ Board, suggesting that the leaked information was being used to promote tax avoidance and influence tax policy discourse globally.

The committee reiterated its recommendation that PwC Australia publish accurate and detailed information about the involvement of its partners and personnel, including names and positions, in the dissemination of confidential government information.

A PwC Australia spokesperson acknowledged the final report and stated that the firm would consider its contents. The spokesperson also mentioned that PwC Australia is making progress in implementing various commitments to change, including adjustments to firm governance, culture, and accountability.

The committee's main report emphasizes the need for the Department of Finance to tighten procurement rules to ensure accounting and consulting firms undergo a more rigorous regulatory process when engaged by government departments. Committee members expressed concerns about whether accounting firm partnerships are too large for individual partners to hold each other accountable for their conduct.

The committee recommended that the partnership model be reviewed by the Australian Law Reform Commission or another appropriate body to determine whether the current operation of partnerships in Australia remains relevant. Another recommendation called for professional accounting bodies to report to parliament on how they enforce standards among their memberships. These professional accounting bodies would also be asked to appear before the Parliamentary Joint Committee on Corporations and Financial Services to be questioned on their reports.

Australian Greens’ Senator Barbara Pocock commented that the report “did not go far enough” and asserted that there should be greater repercussions for PwC and its former CEO, Luke Sayers, for the confidentiality breach. The Greens included more than 50 pages of additional remarks, suggesting further measures such as clamping down on consulting firms found to have behaved improperly, banning PwC from government work until all investigations are completed, and prohibiting political donations from firms tendering for government work.

Earlier this week, there were features published detailing how the Australian government has imposed untested reporting obligations on professional tax bodies following the tax leaks scandal.

By fLEXI tEAM