Australia’s government will legislate “the biggest crackdown on tax adviser misconduct” in the nation’s history, including boosting some monetary penalties 100—fold, Treasurer Jim Chalmers said Sunday.
The measures will give watchdogs stronger powers to investigate and prosecute perpetrators, and boost transparency including by giving more protection for whistleblowers, Chalmers said in a statement. The legislation will be introduced this year, with consultation on reforms starting “shortly,” he 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,” he said.
The reforms come after revelations PwC Australia used confidential information gathered during its tax advisory work with the Australian government to advise global companies on how to benefit from new tax laws.
Read More: PwC Australia Taps New Risk, Ethics Head After Tax Info Scandal
That’s forced the firm to jettison assets and partners involved in the scandal. Investigations into PwC’s handling of confidential information have included a police inquiry and an internal review conducted by former telco executive Ziggy Switkowski.
“The PwC scandal exposed severe shortcomings in our regulatory frameworks,” Chalmers said. “These are complex policy areas that also go to the broader integrity of our taxation and superannuation systems, and the integrity of our capital markets.”
New measures include —
- Increasing maximum penalties for advisers and firms who promote tax exploitation schemes from A$7.8 million ($5.1 million) to more than A$780 million
- Expanding tax promoter penalty laws so they’re easier for the Australian Taxation Office to apply to advisers and firms who promote tax avoidance
- Increasing the time limit for the ATO to bring Federal Court proceedings on promoter penalties from four years to six years after the conduct occurred
- Removing limitations in the tax secrecy laws that were a barrier to regulators acting in response to PwC’s “breach of confidence”