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AFP ‘had insufficient information from ATO to pursue PwC’ in 2018

Regulation

Sample documents were supplied by the Tax Office five years ago but it was only in May that Treasury reported a crime for investigation.

By Philip King 10 minute read

The AFP decided against investigating PwC five years ago after assessing “sample” material provided by the ATO but is now wading through thousands of documents over the alleged misuse of confidential government information, the commissioner says.

AFP Commissioner Reece Kershaw said its investigation of PwC began only in May after a initial finding in 2018 that there was insufficient information to proceed based on documents supplied by the ATO.

“In 2018, the ATO asked the AFP’s then Fraud and Anti-Corruption Centre for advice about the matter,” Commissioner Kershaw said. “This was standard practice for complex tax matters.

“An initial sample of documents was provided to the AFP. There was an understanding between the AFP and ATO that this would help to determine whether an offence may have been committed.

“There was also an understanding the AFP would take no further action without further consulting the ATO.

“Based on the documents provided to the AFP, and further engagement with the ATO, we advised the ATO there was not enough information for the AFP to make an assessment at that time. As such, a referral of a report of crime to the AFP was not progressed.”

The AFP’s current investigation was spurred by Treasury concerns in relation to the alleged misuse of confidential tax information by former PwC partner Peter Collins and others to help multinational clients minimise tax.

The scandal has enveloped dozens of partners and staff at PwC and prompted multiple inquiries.

Commissioner Kershaw said it took until May for a referral to reach the AFP and it was Treasury rather than the ATO.

“Now, it is important to note the AFP did not receive a report of crime for investigation until 24 May, 2023, almost five years later. And that report was from Treasury,” he said.

“Our investigation is underway. It is complex. We expect we will have to triage thousands of documents, and we will need to navigate various legal considerations in relation to these documents.

“This will take some time but we will carry out this investigation with rigour and efficiency.”

The commissioner also denied there was a conflict of interest in former NSW Police commissioner and PwC partner Mick Fuller receiving a contract to review policing in the ACT.

“Over a number of years, governments and other agencies have used former police commissioners to undertake reviews because of their knowledge, the unique role they had in the public service and their connection to community,” he said.

“But to provide more background, and give you some insight into our thinking, I can tell you that we considered other former police commissioners in Australia and offshore to carry out the review, but Mr Fuller had the knowledge needed, given his former police jurisdiction bordered the ACT.

“The bottom line is that Mr Fuller was the best person for the job. In the AFP, we aim to hire the best people for the job.”

He said the AFP has now terminated all contract arrangements with PwC effective from June 30 this year.

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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

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