PWC – Profits Without Conscience

   1   0 Blog, Corporate Tax

logo_pwcAccounting multinational PWC has been condemned in a new report by the UK Parliament’s Public Accounts Committee (PAC) for providing misleading evidence to Parliament and “promoting tax avoidance on an industrial scale.” The Committee, which has led the way globally in exposing the tax avoidance industry, has accused PWC of not disclosing its role in helping hundreds of multinational companies to shift profits to subsidiaries in tax haven Luxembourg in order to avoid paying taxes in the countries where the profits originated.

During the Committee’s hearings, PWC had claimed it was “not in the business of selling (tax avoidance) schemes”.  This claim was subsequently demolished by the evidence revealed by Antoine Deltour, an auditor formerly employed by PWC in Luxembourg, which conclusively demonstrated the industrial scale on which PWC has been creating tax avoidance structures on behalf of its multinational clients from across the planet.  In their damning conclusions, PAC members declared:

“PwC did not convince us that its widespread promotion of schemes to numerous clients, based on artificially diverting profits to Luxembourg through intra-company loans, constituted anything other than the promotion of tax avoidance on an industrial scale.”

The PAC members also condemned PWC’s code of conduct for selling tax advice, which they have described as “not fit for purpose”, and more generally they criticise the tax advising industry for its failure to promote a culture that achieves a balance between profiting from selling services to clients and serving public interest:

“Whilst the code may prevent PwC tax advisers from acting outside of the law, it does not prevent them from devising and selling schemes that have no purpose other than the avoidance of tax. The tax industry has demonstrated very clearly that it cannot be trusted to regulate itself.”

For its part, PWC has disagreed with the Committee’s findings and stated that “we recognise we need to do more to explain the positive role we play in the tax system.”  Readers can draw their own conclusions about whether this is anything other than shameless spin from a company with a long history of audit failures (see here, here and here) , tax avoidance and political spin.

PWC, which has had close political relations with both the current government and the preceding Labour administrations headed by Tony Blair and Gordon Brown, and with the UK’s Treasury (which is heavily infiltrated by City of London interests), responded aggressively to the Luxembourg Leak revelations, accusing Antoine Deltour of “stealing” information of a commercially confidential nature.

Earlier this week, this blogger met with a senior PWC official who repeated this accusation and absolutely denied that Deltour’s actions served public interest.  The official also stated that the public had no legitimate reason to know what tax deals were being struck between governments and multinational companies, even when those deals involved major multi-year upstream oil & gas and mining contracts.

PWC and other leading accounting firms have for decades been engaging in an organised and calculated way to deprive citizens throughout Europe and other continents of hundreds of billions of tax revenue.  They represent a threat to democracy.  TJN heartily endorses the suggestion by Margaret Hodge MP, chair of the parliamentary PAC, that governments – and the European Commission – should immediately take action to ban PWC from all areas of government procurement.

xYou can access the PAC report on the role of the large accounting firms in organised tax avoidance here.  Also take a look at the most recent edition of our flagship newsletter, Tax Justice Focus, edited by Will Snell, which explores the role of tax advisers, for both good and ill, in navigating that fine line between legitimate planning and illegitimate avoidance.

 


Related Posts

UN must defend target to curtail multinational companies’ tax abuse

Photo by Luca Santori, Creative Commons LicenseThe Tax Justice Network, The Independent Commission for the Reform of International Corporate Taxation, and the Global Alliance for Tax Justice call on the UN Secretary General to make sure the commitment to action on tax abuses by multinational companies remains part of the new UN Sustainable Development Goals.

READ MORE →

The BVI: Responsible for worldwide tax losses of $37.5 billion a year

BVI report blogAn extraordinary report by consultants Capital Economics, for BVI Finance, claims that the British Virgin Islands are responsible for $1.5 trillion of assets invested around the world, and that these result in 2.2 million jobs and $15 billion in tax revenue. A better approximation would be that the BVI imposes global tax losses of $37.5 […]

READ MORE →

Event: Making Tax Work for Women in the UK and Globally

Invitation_ Tax and Gender eventOn Wednesday 28th June 2017 at 16.30 our very own Liz Nelson will be speaking at an event in London that aims to bring together gender and tax justice advocates to highlight the need for coherent and gender-responsive fiscal policies to safeguard the rights of women and girls both in the UK and globally. The […]

READ MORE →

Historic event on women, human rights and tax justice in Bogota

BogotaLast week civil society organisations, researchers, labour union activists and policy makers met in Bogota, Colombia to explore how tax justice issues can ensure governments, multinational corporations and others meet their obligations to women in order to secure their full range of human rights. The Women’s Rights and Tax Justice conference opened with a conversation […]

READ MORE →

The Offshore Wrapper: the Panama Papers, one year on

Photos from the Protest outside PwC 1 Embankment Place, part of the Global week of action for tax justiceWelcome to the Offshore Wrapper – your weekly update from TJN.  Happy Paniversary! This week it’s been one year since the Panama Papers were leaked, and a number of organisations around the world have been marking the occasion though the global week of action for tax justice. In London, activists from the TJN and the […]

READ MORE →

One thought on “PWC – Profits Without Conscience

  1. Garry Sharp says:

    I agree with Margaret Hodge, MP, PwC should be banned from all areas of government procurement, especially in areas of advice on tax and financial matters as well as credit ratings assessment. This ban should apply in all OECD countries!

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top