Annual Review 2006 - PwC

Why?
Thought
Leadership.
Regulatory
Environment
PricewaterhouseCoopers and other groups, particularly the
Business Council of Australia, have for some time expressed
concern about the complexity and cost of Australia’s
regulatory environment.
Over the past year, government responded with a number of
inquiries that provided opportunities to further pursue this
vital debate.
In a submission to the Federal Government’s Regulation Taskforce
and in a range of public forums, PwC argued against giving auditing
standards the force of law and that harmonisation of Australian and
overseas systems for audit regulation could be progressed without
the introduction of more red tape and cost.
We welcomed the release of the Taskforce’s fi nal report in August
2006, especially the commitment to making it harder to introduce
new rules and fi ve-yearly screening of existing regulations. Other
changes to accounting methods for small business were also
welcome, though CEO Tony Harrington said it was important to
continue with reform.
Tax
Reform
The fi rm also provided a submission to the Corporate and Financial
Services Regulation Review, led by the Hon Chris Pearce MP.
On remuneration disclosures, we argued for the requirements to
be contained in one place only (the Corporations Law), and for
the disclosures to be simplifi ed, separate from both the directors’
report and the fi nancial report.
Another major area in need of reform is tax. PwC contends
that more emphasis needs to be placed on the effectiveness
of our business tax regime in its entirety.
At PwC we have developed a Total Tax Contribution framework,
which the UK’s largest companies have deployed to better
understand and enumerate their total tax contributions. Working
with the Business Council of Australia (BCA) and the Corporate Tax
Association (CTA), we are adapting this framework for application
to Australian businesses.
The Total Tax Contribution framework enables businesses to
calculate their total tax contribution so that they can accurately
quantify, report and manage their business taxes. Currently few
companies have coordinated and comprehensive information
on all their business tax payments. In our view every company
should know the total amount of tax it pays.
74 PricewaterhouseCoopers
A proper focus on total tax contribution provides visibility to a
company’s internal stakeholders on the impact of all taxes on
the business and enables management to make more informed
decisions. It also improves tax risk management, controls and
the management of tax resources.