PwC has launched an independent review of the practices and culture of its Australian unit after the publication of internal emails related to a scandal involving the sharing of confidential government information on planned tax laws.
The emails, published by a senate committee, showed how PwC had used confidential information provided by Peter-John Collins, its former head of international tax in Australia, to win new business by advising clients on Australian rules aimed at clamping down on tax avoidance.
Collins was a member of an advisory group involved in confidential discussions with Australia’s Treasury department last decade about introducing laws targeting multinational tax avoidance and a diverted profits tax.
He was banned by the tax watchdog 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 the information provided by Collins stretched beyond Australia and included employees in the UK, Ireland and the US.
Tom Seymour, the head of PwC Australia and former leader of the tax practice where Collins worked, admitted at an internal meeting on Friday that he was one of a number of partners who received emails about the “marketing approach and financial success of the tax advice He said this showed evidence of the “cultural problem at the time”.
PwC Global said the consultant would take “appropriate action” after a review of the Australian unit and its partners. “We deeply regret the situation that arose in Australia. It is unacceptable and goes against our culture and values,” it said.
PwC’s Australia business is one of the largest in its global network, reporting revenues of A$3bn ($2bn) in its most recent financial year. The Australian government is its largest customer and the scandal has triggered a backlash in the country.
Jim Chalmers, Australia’s Treasurer, has beefed up the powers of an accountancy industry watchdog in response to PwC’s behavior which he described as “completely unacceptable”. Barbara Pocock, a Greens senator, has called for PwC to be banned from further government work and for it to reveal the 14 clients it advised based on Collins’ advice.
The 144 pages of internal confidential correspondence showed how PwC used confidential information from Collins to woo clients, including US technology companies. With its inside track, it was able to advise multinationals on how to deal with Australia’s new tax arrangements almost as soon as the laws were Published in 2015 and 2016.
A January 2016 email celebrated $2.5mn in new business in North America, which one partner wrote had been “heavily helped by the accuracy of the intelligence that Peter Collins was able to supply”. The Australian tax partners had worked “extensively” with other PwC firms around the world, including in the US, Netherlands and Singapore, the email said.
Collins regularly stressed in the communications that the information was “strictly confidential” and should be treated as “rumour”.
PwC’s global bosses launched a $12bn investment and branding push in 2021 that placed “earning trust” from a wide range of stakeholders at its core. The plan included creating a Trust Leadership Institute where PwC would educate clients on how to “build trust”.
The Australian controversy is the latest high-profile issue faced by PwC over its tax practice. A former PwC employee convicted for disclosing documents in the LuxLeaks scandal, which revealed the firm’s role in helping multinationals win approval for tax avoidance structures, was recognized as a Whistleblower by the European Court of Human Rights in February.