Our cover story looks at the Australian tax leaks scandal and the implications for PwC Australia. The firm is grappling with the fallout from the revelations of confidential information on tax policy being shared by email.
These emails included policy details from high-level meetings with Treasury officials. At first, it was unclear how many people had received confidential information. PwC recently named 67 recipients of emails in a letter to the Senate.
A series of high-profile resignations followed soon after the leaks. An independent inquiry has also been launched, though the story is far from over. The leaked messages go beyond Australia’s sunny shores as far away as Ireland, Singapore and the US.
The last thing any firm wants is a scandal which it cannot contain and manage – least of all a firm as invested in trust as PwC. We can understand why the firm has moved quickly to remove members of staff implicated in the leaks, but this story is not slowing down.
It’s possible that the Australian government will take the leaks scandal as a pretext for wrapping tax advisers in more red tape, inviting other countries to follow suit. Advisers are already facing more regulatory pressure, particularly from the EU.
A lot of senior tax professionals outside PwC who have worked with governments will be searching their minds for any possible indiscretions either in speech or in writing. WhatsApp messages and emails are not to be written hastily.
We know what often begins as a tax scandal rarely ends with a few headlines. Many reforms have been implemented over the last decade, spurred by public outrage over tax avoidance and evasion. This could be another catalyst for stricter rules.
