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  • Writer's pictureBy The Financial District

Australia Cracks Down On Advisers After PwC Tax Leak Scandal

Australia will drastically tighten penalties for promoters of dodgy tax schemes and beef up the power of regulators as part of reforms announced in response to a scandal over the use of leaked tax plans by PwC Australia, Lewis Jackson reported for Reuters.

Photo Insert: PwC Australia was not fined for the breach under the existing rules, and the changes will not applied retroactively.

The leak of confidential government tax plans by a former PwC Australia partner, revealed in January, caused a national scandal that has forced out 12 partners, including the chief executive, triggered the sale of PwC's 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.

PwC Australia was not fined for the breach under the existing rules, and the changes will not applied retroactively, a Treasury spokesperson told Reuters.

"The PwC scandal exposed severe shortcomings in our regulatory frameworks," said the statement from the ministers for treasury and finance and the attorney general.

"We’re cracking down on misconduct to rebuild people’s faith in the systems and structures that keep our tax system and capital markets strong."

All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

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.

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