PwC has launched an independent review of its Australian unit’s practices and culture after the publication of internal emails relating to a scandal involving the sharing of sensitive government information about planned tax laws.
The emails, released by a Senate committee, showed how PWC extension he had used insider information provided by Peter-John Collins, his former head of international tax in Australia, to win new business by advising clients on Australia’s rules aimed at cracking down on tax avoidance.
Collins was a member of an advisory group involved in confidential discussions with the Australian Treasury Department over the past decade on the introduction of laws against multinational tax avoidance and a diverted profits tax. He had signed strict non-disclosure agreements.
It has been banned since the tax audit in January, at which point PwC indicated that a small number of partners had received the confidential information.
The release of the partially redacted emails in recent days, however, showed that the information Collins provided extended beyond Australia and included employees in the UK, Ireland and the US.
Tom Seymour, head of PwC Australia and former tax practice leader where Collins worked, admitted in an internal meeting on Friday that he was one of several partners who received emails about the marketing approach and financial success of tax advice” . He said this showed evidence of “the cultural problem at the time”.
PwC Global said the adviser would take “appropriate action” following a review of the Australian unit and its partners. “We are deeply sorry for the situation that has arisen in Australia. It is unacceptable and goes against our culture and our values.
PwC’s Australian business is one of the largest in its global network, with revenues of A$3 billion ($2 billion) in the last financial year. The Australian government is his biggest client and the scandal has sparked a backlash in the country.
Jim Chalmers, Australia’s treasurer, stepped up to the powers of an accounting sector watchdog in response to PwC’s behavior which he described as “completely unacceptable”. Barbara Pocock, a Green Senator, has called for PwC to be banned from further government work and for her to disclose the 14 clients she has advised based on Collins’ advice.
The 144 pages of internal correspondence showed how PwC used Collins’ confidential information to woo customers, including US technology companies. With her in-house track record, she was able to advise multinationals on how to deal with Australia’s new tax rules as soon as the laws were released in 2015 and 2016.
A January 2016 email celebrated $2.5 million in new business in North America, which one partner wrote was “helped greatly by the accuracy of the intelligence Peter Collins was able to provide.” The Australian tax partners had worked “extensively” with other PwC firms around the world, including the US, the Netherlands and Singapore, the email said.
Collins regularly stressed in communications that the information was “strictly confidential” and should be treated as a “rumor”.
PwC’s global leaders have launched a $12 billion investment and branding drive in 2021 that has put ‘earning trust’ from a wide range of stakeholders at its heart. The plan included creating a Trust Leadership Institute where PwC would educate clients on how to “build trust”.
The Australian dispute is the latest high-profile issue PwC has faced on its tax practice. A former PwC employee convicted of disclosing documents in the LuxLeaks scandal, which exposed the company’s role in helping multinationals gain approval for tax avoidance structures, has been found as a whistleblower by the European Court of Human Rights. man in February.
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