Accounting giant PwC in crisis amid growing Australian tax leak scandal
25th May 2023
It's no secret the Australian government relies on consulting firms to complete necessary work. But a growing tax leak scandal at PwC Australia has led to a reckoning for the lucrative consulting industry over the role it plays in the murky world of tax minimization.
At the center of the scandal is Peter Collins, a senior PwC tax expert, who was outed by ICIJ partner the Australian Financial Review for using secret government information to advise clients — Google, Apple and Microsoft likely among them — on how to sidestep new tax laws. Internal emails confirmed Collins shared the intel with dozens of his colleagues and PwC used it to book millions in fees within hours of laws, meant to curb tax avoidance, being announced in 2015.
Collins was banned from acting as a tax practitioner, while his boss, Tom Seymour, stepped down from his role as CEO of the Australian arm of the accounting giant once known as PricewaterhouseCoopers. But the consequences have spread further, well beyond an amusing skewering by the Australian public broadcaster. So, what next?
The matter has already engulfed parts of PwC's global operation and was this week referred to the Australian Federal Police by the Treasury. Meanwhile, the Australian treasurer has promised to "crack down" on consultants that abuse their access to confidential government information, though he has yet to reveal what exactly the "further steps" he intends to take might entail.
Some lawmakers have called for the PwC team members involved, and the companies they advised, to be named and shamed. Others want the firm banned from government contracts. But, with the government forking out at least a billion dollars a year to consultants, as one senator put it: "The bigger question remains, are we looking at just the tip of the iceberg; what is going on in the larger industry of big consulting?" Read more here.
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International Consortium of Investigative Journalists
