Treasury announces extreme crackdown on tax advisers
The Treasury has announced the “biggest crackdown on tax adviser misconduct in Australian history” after breaches by PwC.
In a joint statement from Treasurer Jim Chalmers, Minister for Financial Services Stephen Jones, Senator Katy Gallagher and Attorney-General Mark Dreyfus, it said the government is taking steps to clear up the mess from the scandal.
Earlier this year, it was announced that confidential government documents about anti-tax avoidance laws had been leaked by a former PwC partner.
Peter Collins was part of a confidential consultation by Treasury to improve tax laws including new rules to stop multinationals avoiding tax by shifting profits from Australia to tax and secrecy havens. However, Collins made unauthorised disclosures of this confidential law reform information to partners and staff of PwC.
The Tax Practitioners Board found Collins failed to act with integrity, as required under his professional, ethical and legal obligations, and terminated his tax agent registration. He was also banned for two years from working as a tax practitioner.
It also determined PwC failed to properly manage conflicts of interest when this confidential law reform information was shared with partners and staff in their tax practice.
The Australian Federal Police has commenced a criminal investigation into PwC, and inquiries are being undertaken by the Parliamentary Joint Committee on Corporations and Financial Services and the Senate Finance and Public Administration References Committee.
“The PwC scandal exposed severe shortcomings in our regulatory frameworks that were largely ignored by the Coalition, and today we’re taking significant steps to clean up the mess,” the joint statement said.
“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.
“We’re also cracking down on the scourge of multinational tax avoidance and making sure multinationals pay their fair share of tax in Australia.”
The package of reforms covers strengthening the integrity of the tax system, increasing the power of regulators and strengthening regulatory arrangements to ensure they are fit for purpose.
Among the measures include an increase in the maximum penalty for advisers and firms who promote tax exploitation schemes from $7.8 million to $780 million, removing limitations on tax secrecy laws, protection for whistleblowers who give evidence of tax agent misconduct, and increasing the time limit for the ATO to bring Federal Court proceedings.
Consultation on the reforms will begin shortly with the intention to introduce legislation this year.
AUTHOR
Laura Dew
Recommended for you
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
The Senate economics legislation committee has recommended Schedule 1 of the Delivering Better Financial Outcomes legislation be passed as it is a “faithful implementation” of the recommendations.
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
