Australia Announces Tax Adviser Crackdown After PwC Leak Scandal

Sydney
Australia will drastically toughen penalties against promoters of dodgy tax schemes and beef up regulatory powers under reforms announced on Sunday in response to a scandal over the use of leaked fiscal plans by PwC Australia. The leak of the confidential government documents, by a former partner at the professional services firm, was revealed in January. It caused a scandal that has forced out 12 PwC Australia partners, including the chief executive, triggered the sale of its lucrative government consulting wing for $A1, and embroiled clients Google, Uber and Facebook. Bills to be introduced this year would raise the maximum penalty for promoting tax exploitation schemes 100-fold to A$780 million ($510 million) and make prosecution easier by expanding how the rules, which have only been used six times, are applied, according to a government statement. A former PwC partner, Peter Collins, who advised the Australian government on anti-tax avoidance laws between 2013 and 2018, shared confidential drafts with colleagues about the government’s plans, which were then used to drum up business with multinational companies. The new package of reforms would tweak these secrecy laws, strengthen whistleblower protections and give tax regulators more time to investigate and bring cases to court. A review that will deliver recommendations over the next two years will look into broader questions raised by the scandal, including how large consulting and accounting firms are regulated, the use of legal professional privilege claims and new threats to the tax system.