Early View Article - The Big Four and corporate tax governance: From global dis-harmony to national regulatory incrementalism

The Big Four and corporate tax governance: From global dis-harmony to national regulatory incrementalism

The Big Four professional services firms – PwC, Deloitte, KPMG and EY – promote, sanction, and regularise the behaviour and practices of business and government. This is especially the case in the area of multinational tax avoidance. This large, and growing, sector of the Big Four's business model places them at the centre of both causing and addressing the problem. Their role is not limited to advising MNCs on complex tax structures. They also advise governments and international organisations on regulatory reform of the global tax system. This article examines their role in so doing through an analysis of Australian Senate Inquiry hearings and responses to the OECD reform programme on the digitalisation of the economy. We show that advice provided by the Big Four is not purely technical, but is intended to achieve a global corporate tax system that is either globally dis-harmonised or a matter of national regulatory incrementalism. This is despite their claims of supporting global regulation based on multilateral agreements. Ultimately, we demonstrate that the Big Four use their significant structural power to discursively undermine the ideals of the OECD, the leading international organisation working to reform global taxation.

Policy Implications

  • In regard to the participation of the Big Four in economic policy-making arenas, it should be widely acknowledged that their advice is self-interested in service of their business model and the facilitation of ongoing tax avoidance by their clients.
  • If states do not fully implement the suite of reforms the OECD has recommended, the result will likely be a globally dis-harmonised tax system. The Big Four will therefore continue to profit from tax competition between states.
  • Governments suffer direct losses due to the advice the Big Four give their clients, yet they continue to seek the advice of the Big Four to address the tax avoidance problem. Governments and multilateral organisations should cease seeking advice from the Big Four or at the very least hold these firms to account by asking why their advice changes in differing contexts.
  • There should be further interrogation of the advice the Big Four have thus far given around multilateral reform, with a particular focus on the meaning of global reform. OECD reform should not be conflated with rigorous and substantive global tax reform, which would capture traditional ‘tax havens’.
  • States should fully support multilateral reform, avoiding unilateral action and a race-to-the-bottom on tax. Overall, substantive multilateral reform will increase the total amount of tax collected globally. This is a positive outcome for all states but can only be achieved if states collectively pursue the collection of corporate taxes.


Photo by Tara Winstead