What’s going on with PwC’s tax leak scandal?
Big four accounting firm PwC has come under intense scrutiny in recent weeks over its Australian business, which has been caught up in a scandal over the misuse of information gained from a government contract.
PwC Australia came under fire after the country’s parliament published emails showing that the firm used information it obtained while working with the government to help it win business advising firms on new anti-tax avoidance rules.
The head of PwC’s Australia business and two other executives have since resigned over the scandal. Yesterday, nine partners were suspended while the firm also confirmed it will make an internal investigation public when it is completed.
The Australian Treasury has referred the situation to the federal police to consider a criminal investigation.
Speaking in Parliament today at an inquiry into the affair, a spokesperson for the Australian tax office said it had stopped several attempts by multinational firms to avoid paying tax around the time of the leaks.
According to Reuters, commissioner Chris Jordan told senators that many firms restructured their affairs “suspiciously and quickly” after the introduction of new anti-tax avoidance laws in 2016.
In an open letter published yesterday, acting chief executive Kristin Stubbins said she wanted to “apologise on behalf of PwC Australia”.
The failures, Stubbins said, reflected “a culture of aggressive marketing in our tax business” and highlighted that the firm did not have “adequate processes and governance in place.”
The firm said it was moving to ringfence its government work “to minimise conflicts of interest and enhance governance”.
“We know enough about what went wrong to acknowledge that this situation was completely unacceptable. No amount of words can make it right,” she said.
Australian Prime Minister Anthony Albanese said the misuse of government information was a “terrible indictment” on the company.
PwC has come under pressure from politicians to publish the names of all employees who were included on the email trail.
Labor senator Deborah O’Neill told the Guardian that anything less than naming all 53 partners involved would be a “continued obfuscation and coverup”.
However, in her open letter, Stubbins said: “We believe that the vast majority of the recipients of these emails are neither responsible for nor were knowingly involved in any confidentiality breach.”
She also distanced any of PwC Australia’s clients from the breach.
Speaking on the radio, Albanese said: “All of this should become public at the appropriate time, of course there are investigations under way and I don’t want to say anything to interfere with those processes”.
“Quite clearly, what went on there is completely unacceptable,” the Prime Minister continued.