Industry board says the banning of one PwC partner is just the beginning of its tough stance

The Tax Practitioners Board’s new chair, Peter de Cure, says its initial action against PwC is only the beginning and has put the broader industry on notice.

PwC Australia and members of its tax practice may face harsher penalties from a fired-up Tax Practitioner Board, which is set to focus on the professional services giant over its use of confidential briefings to shape aggressive tax minimisation strategies.

Speaking to The Australian, TPB chair Peter de Cure said the regulator intended to bring a muscular oversight to the space which empowers it to take more aggressive action to target improper conduct.

Mr de Cure, who was appointed as the TPB chair on May 26, said he was carefully considering how the regulator would respond to the scandal that has gripped PwC in recent months.

“We are continuing to investigate, to make sure there are no other incidents that are breaches of the TASA code of conduct,” Mr de Cure said.

“These are serious matters for the people involved.

“The purpose of our inquiries is to make sure there are no other people who’ve breached their obligations under TASA.”

The TPB has already hit PwC’s former head of international tax, Peter Collins, with deregistration and a two-year ban on reapplying for his licence.

Mr Collins was referred to the regulator by the Australian Taxation Office over concerns the tax partner used confidential information obtained from Treasury briefings and shared it with PwC staff.

The TPB imposed a good-behaviour order on PwC over its role in the scandal, in which the firm engineered aggressive tax minimisation strategies.

PwC will every six months be required to run training for relevant partners and staff on complying with the Tax Agent Services Act and PwC’s conflicts of interest rules.

Under the terms of the penalty, the firm’s chief strategy, risk and reputation officer, Sean Gregory, was required to report to the TPB every six months “on the management of the participation of relevant partners and staff in confidential tax consultations with Treasury, the Board of Taxation and/or other Australian government agencies”.

However, Mr Gregory resigned from the role but remains with the firm.

Tony O’Malley has been appointed PwC’s new chief risk and ethics leader.

PwC is due to report to the TPB in the coming weeks in the first of its responses to the regulator.

But Mr de Cure said the TPB may consider taking further action against PwC.

“If there was another specific breach we wouldn’t be prevented from investigating another breach,” Mr de Cure said.

The Australian Federal Police is investigating the PwC matter after Treasury referred Mr Collins’ conduct.

The AFP has warned that if further PwC staff were identified as having been involved in breaching confidentiality agreements, they may face action.

Mr de Cure said the TPB had not started its formal investigation into PwC or the firm’s partners but was well advanced in its preliminary inquiries.

PwC this week handed over a list of 63 partners and staff to a parliamentary inquiry scrutinising the use of consultants in government.

“We have made information requests to PwC,” Mr de Cure said.

This has come alongside moves within the TPB to review a tranche of emails it seized after investigating Mr Collins.

The TPB is required to resolve the investigation within six months of formally notifying firms and tax agents they are the subject of a probe, but Mr de Cure said the regulator would consider extending its time frame “if circumstances are beyond our control”.

Mr de Cure said the TPB might not allow PwC staff or partners to surrender their tax registration to avoid the potential fallout of findings being made against them.

The actions against PwC might be the first test for the regulator, which is set to be handed additional powers including the capacity to levy fines and penalties against firms and individuals.

Mr de Cure said the expanded powers were a “sensible” addition to the regulator’s armoury.

“The sanctions need more teeth so appropriate action can be taken where there is poor behaviour,” he said.

“At the moment we’re limited to issuing a caution, making an order, or suspending or terminating someone.”

The 25-year veteran of KPMG’s accounting practice and six-year member of the TPB said the regulator had an opportunity to weed out bad operators from the sector.

In particular Mr de Cure said the TPB would examine accountants offering aggressive tax-minimisation strategies to clients, including those attempting to claim excessively for expenses.