A division of the CRA, the Competent Authority Services Division (CASD), responsible for undertaking tax enforcement on multinational firms has been accused of violating policy and exposing the authority to disrepute following revelations of a secret tax deal that was granted to a major corporation.
Over 2,000 pages of highly sensitive government documents were filed at the Federal Court that provided details on the said deal. According to the documents, the deal had earlier been rejected by a past CASD director. A CRA manager has also declined to approve the deal and claimed that an executive had attempted to pressure him to support it.
According to records provided, the division responsible for handling such matters had also rejected the deal, stating that such an arrangement would result in lower tax revenues. Despite opposition at the lower levels, agency executives are said to have moved forward with the deal in 2019. As a consequence, some staff that felt the deal was granted under inappropriate pressure filed internal complaints on the matter.
The CRA has stated that the deal was favourable to the agency and that those accused of wrongdoing were cleared by an investigation by the Internal Affairs and Fraud Control Division. They however declined to share the investigation report, nor identify the multinational involved.
The deal however reportedly triggered a storm of allegations and counterclaims being made between executives and staff. Two CRA employees have made an application to the Federal Court asking that the integrity commissioner not cease investigations into other claims of wrongdoing, including those that the CRA had created a toxic work environment.
A recent 2021 report by psychological consultants engaged to assess the CRA found that the division had problems with bullying and harassment. About 50% of staff claimed to have been victims of bullying, harassment or intimidation. Just less than half of the staff also felt that their unit was ineffective in influencing global tax standards, with some claiming they were being spied on. Several managers also affirmed that they felt disrespected and harassed by some of their directors.
The report was part of documentation filed at the Federal Court concerning workplace harassment suits made against the CRA. According to the other filed documents, a senior agency director was noted for making hiring decisions that were in contravention of rules and failing to set an appropriate leadership tone.
CRA Commissioner, Bob Hamilton, has been called upon by a parliamentary committee to testify in response to the massive disclosure of sensitive internal documents that have revealed these and other allegations of wrongdoing at the CRA division.
Contact Accountancy Insurance
We would love to hear from you.
About Accountancy Insurance:
Thousands of accounting firms offer our tax audit insurance solution, Audit Shield to their clients. Find out why.