PwC’s international summit has travelled to Australia to take firm action to limit the damage caused by a trust issue surrounding tax legislation. The chairman of the Board of the Australian member firm has now had to clear the field.
PwC Australia Ceo Tom Seymour resigned three days after admitting he knew about the controversial strategy of the international tax advisory practice in Australia. Some other leaders of the Australian PwC organization have also resigned.
Peter-John Collins, who previously led PwC’s Australian international tax practice, has been involved in the Australian Government’s design of new tax measures in the past. Legislation intended to prevent tax evasion. However, he already shared his knowledge of this during development with fellow tax specialists, who then helped their clients to circumvent the new legislation.
The sharing of the information was not only limited to Australia, but also reached PwC tax professionals in the US, UK, Ireland and possibly Singapore and the Netherlands, according to the FT. Collins was praised in mutual mail traffic for the quality of his advice, which brought PwC millions of new business internationally, including at tech companies in Silicon Valley.
The issue played out in the years 2014-2017, the FT believes on the basis of the relevant mail traffic. Earlier this year, the Australian regulator Tax Practitioners Board suspended Collins as a tax advisor for two years over the issue. In the meantime, the law firm Linklaters, among others, is investigating the case.
Moral and ethical failure
According to Australian senator Deborah O’neill, PwC’s internal messages point to a “moral and ethical failure” within the organisation. “These are not a few rotten apples. It is a widespread cultural problem and reaches far beyond Australia, ” the senator told the FT.
O’neill insists on publishing overviews of involved PwC partners and companies who would have benefited from sharing the confidential information. According to one person involved, the issue is particularly painful for PwC’s reputation, because the organization places trust at the heart of its own image campaigns.
Professor Jan Bouwens States in his column on this site, in which he discusses the case, that the internal control at PwC seems to be rattling.