PwC wrongfully claimed legal privilege over documents to frustrate tax office, inquiry

Consulting giant PwC systematically frustrated the Tax Office by wrongfully claiming legal privilege over thousands of documents, according to the evidence of the former general counsel and chief executive in their first statements since they resigned following the tax leaks scandal.

Former chief executive Tom Seymour and general counsel Meredith Beattie appeared on Friday before a parliamentary committee examining structural challenges in the audit, assurance and consultancy industry in a hearing that became heated at several points during the day.

Current chief executive Kevin Burrowes was accused of misleading an earlier Senate inquiry for not disclosing he was being paid $1.2 million by the international arm of PwC while running the Australian firm.

While former chief Luke Sayers became visibly frustrated explaining his dealing with former Australian Taxation Office deputy commissioner Jeremy Hirschhorn, who he said liked to gossip, and “wax lyrical” and “pontificate” on PwC’s culture rather than use his regulatory powers to identify and rectify problems.

Friday’s inquiry was examining whether the partnership models at professional services firms were appropriate to continue with, and whether the regulation and law were adequate. The parliamentary probe was sparked after the Tax Practitioners Board last year found former PwC partner Peter Collins shared confidential government information on tax reform, and the federal police launched an investigation into the matter.

Seymour told the committee he had asked PwC lawyers to investigate Collins over a confidentiality breach in 2018, and was told there had not been a breach, adding he would have “loved that not to have happened”.

Earlier, Beattie said she had raised concerns with Sayers about how parts of the tax practice were operating while Seymour was its leader.

Around 2017-18, the Tax Office had asked the consulting giant to produce thousands of documents, putting the firm under huge pressure, the inquiry heard. Beattie claimed PwC’s tax division had not been appropriately responding to the ATO’s requests, laying the blame at the feet of Seymour.