Australia announces tax adviser crackdown after PwC leak scandal

investing.com:

By Lewis Jackson

SYDNEY (Reuters) -Australia will drastically toughen penalties against promoters of dodgy tax schemes and beef up regulatory powers under reforms announced on Sunday in response to a scandal over the use of leaked fiscal plans by PwC Australia.

The leak of the confidential government documents, by a former partner at the professional services firm, was revealed in January.

It caused a scandal that has forced out 12 PwC Australia partners, including the chief executive, triggered the sale of its lucrative government consulting wing for $A1, and embroiled clients Google (NASDAQ:GOOGL), Uber (NYSE:UBER) and Facebook (NASDAQ:META).

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.»

PwC Australia would digest the announcements carefully and work with government and regulators to «enhance overall regulation of our industry», a spokesperson said in a statement.

A former PwC partner, Peter Collins, who advised the Australian government on anti-tax avoidance laws between 2013 and 2018, shared confidential drafts with