ATO timeline reveals meetings with former PwC CEO Luke Sayers over tax scandal investigation
Former PwC Australia boss Luke Sayers repeatedly met with the Australian Taxation Office amid a probe into the accounting group’s tax leaks.
Former PwC Australia boss Luke Sayers’ links to the corporate scandal surrounding the firm have been revealed after the Australian Taxation Office showed it repeatedly met with him amid a probe into the accounting group’s tax leaks.
In its response to an order from the Senate, the ATO has confirmed second commissioner Jeremy Hirschhorn repeatedly met with Mr Sayers as well as several other senior figures in PwC as the tax office raised concerns over the firm’s response to new tax laws.
The documents show the ATO became aware PwC’s former head of international tax Peter Collins may have breached confidentiality deeds signed with the government in 2017, more than six years before he was banned by the industry regulator.
The ATO timeline shows Mr Hirschhorn again met with Mr Sayers in February 2020, telling him the tax office had a “range of concerns … with PwC Tax Group’s behaviour”.
Mr Sayers previously ran PwC’s tax and legal practice before he was elected CEO in 2012.
Mr Sayers has previously denied he had any knowledge the firm was being investigated for its breach of confidentiality deeds, noting in a previous statement he “ was not aware of the confidentiality issues that have since emerged within the International tax practice at PwC”.
However, Labor senator Deborah O’Neill said the document shows “for years PwC was aware of the misconduct engaged in by members of their firm and did nothing to censure those who participated, or to meaningfully reform the culture of their organisation”.
“The ATO contacted Luke Sayers, who has since denied his knowledge of or involvement in the scandal, in his capacity as CEO in 2019,” she said.
“It is now clear that he was intimately involved in the management of this issue, and his denial of involvement is an obvious misrepresentation of fact.”
Senator O’Neill said “either Mr Sayers ignored this advice, or the entirety of the PwC Board failed to act on this information”.
“All of the numerous PwC employees who this document demonstrates were aware of the misconduct clearly failed to act to reform or redress the serious ethical wrongdoing occurring within their firm,” she said.
Parliament has revealed how Mr Collins leaked confidential government briefings about new tax laws to his colleagues in the firm in a bid to front-run the new laws set to be introduced in 2015.
The Coalition government put in place the Multinational Anti-Avoidance Law in a bid to force major corporations to pay more in tax.
The report shows the ATO first identified Mr Collins had been involved in MAAL consultations “and may have shared information subject to confidentiality obligations” in October 2017.
This contrasts with evidence given by PwC’s then-acting chief executive Kristin Stubbins in a NSW inquiry that the firm only became aware of a confidentiality deed in relation to Mr Collins “in March 2021”. The ATO’s response reveals its deputy commissioner Mark Konza, and other tax office staff met with PwC tax partners and a client on August 29, 2016 which saw the firm confirm they were “responsible for the MAAL structuring using foreign partnerships”.
The document reveals the ATO confirmed to PwC at the time the firm’s structures to avoid the MAAL were “seen as tax avoidance”.
Mr Hirschhorn and an ATO executive adviser met with PwC’s Australian tax leader Pete Calleja and financial advisory managing partner Tom Seymour the following day, which saw the tax office raise its concerns regarding “MAAL structuring” directly with the firm’s leadership.
Mr Seymour, who became PwC chief executive after Mr Seymour, has since stepped down from his role at the firm and been removed for his “failure to adequately exercise their expected leadership or governance responsibilities”.
The Australian Taxation Office has revealed it issued 15 compulsory information gathering notices to PwC between October 2016 and April 2021 as the tax office fought with the firm over access to information into its breach of confidentiality deeds and promotion of aggressive tax planning strategies.
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