What did the Pandora Papers reveal exactly?
Five years after the Panama Papers, tax evasion is still going strong.
The Pandora Papers are a massive, years-long investigation into the leaked files of 12 cabinets specialising in the creation of offshore businesses. Hundreds of journalists have analysed millions of documents to ignite a major scandal on a scale similar to the shockwave created by the Panama Papers in 2016. 300 high-ranking civil servants, 35 heads of states and 130 billionaires have been shown to resort to offshore, tax-dodging financial setups to evade taxes and sometimes to launder money. The well-kept secrets of these cabinets located in Belize, Cyprus, Dubaï, etc. have been laid bare and, it so turns out, they play a central role in a worldwide financial system geared to favour the very rich. For a few thousand dollars, the wealthiest can afford the financial protection of a dummy company and avoid the tax collector. Such arrangements represent billions of lost tax revenue for states and governments: these revelations have predictably caused an uproar in the COVID-19 world, especially at a time when citizens and governments alike are about to foot the COVID-19 bill.
Numerous prominent politicians were dragged in the scandals, including 35 heads of states or organisations (former or incumbent). Tony Blair, the former British Prime Minister, Dominique StraussKahn, former head of the IMF, Volodymyr Zelensky, the incumbent President of Ukraine, Sebastian Piñeda, the incumbent President of Chile, or Andrej Babiš, the Czech Prime Minister are among the cabinets’ customers caught in the net. Vladimir Putin has also been associated with some of the files released to the journalists.
Bankers, legislators, businesspeople, sports personalities, media personalities and members of organised crime have also been named.
Reactions
The furore caused by the publication of the Pandora Papers mirrors that of the 2016 Panama Papers. According to the United Nations, a staggering $7 trillion in stolen assets are kept in offshore tax havens: the sheer scale of the phenomenon is nothing new – the Panama Papers highlighted it after all – but the reminder has been a painful one. Most of those named in the files denied any wrongdoings, while some even denied any implication. The Kremlin insisted that the leak was made up of “unsubstantiated claims” even though the names of several of Vladimir Putin’s friends and associates featured in the documents. Andrej Babiš, the Czech PM, denounced the Pandora claims as a murky plot intended to destabilise him in the run-up to political elections, even though the files reveals that he used a complex setup to purchase a luxurious mansion in France back in 2013. As Jordan’s King Abdullah II was enmeshed in the scandal, Jordan’s royal court reacted angrily to the report, even though it showed that the King had splurged $100 million on properties in the US and in the UK. Others simply retorted that they had done nothing illegal. Such dealings are not exactly – or not always – illegal, some may even be legitimate, but they are clearly exploiting the loopholes of international law. They are also unanimously condemned as immoral in the pandemic world where billions were spent in an attempt to mitigate its worst effects.
A central role in a worldwide financial system geared to favour the very rich.
Taxpayers expect to bear the brunt of the cost incurred by COVID-19: that the wealthiest should dodge taxes through complex financial setups is condemnable in the eyes of many, including the White House. In a tweet, the Biden administration has pledged to “crack down on the unfair schemes that give big corporations a leg up” as well as to “ensure that the super-wealthy pay their fair share”. Many heads of governments, including Spain, Mexico, Panama, Pakistan, India, Brazil, the UK and Australia are determined to investigate the Pandora files.
Perspectives?
Susana Ruise, tax lead for the global anti-poverty group Oxfam International, released an official statement condemning those involved in the offshore dealings of the Pandora Papers. “[It] must prompt immediate action, as has long been promised”, she said. Alex Cobham, economist and chief executive of the Tax Justice Network, excoriated the purely personal actions of some personalities named in the leak, but insisted that the blame should be laid on those professional “enablers”, that is banks, law firms and accountants, as well as the countries facilitating such transactions. The individual people caught in the Pandora net are not the problem, rather those surrounding and enabling them to cart off their money in offshore havens are. European politicians deem the Papers the much-needed “wake-up call” to reform national and European finances, but have yet to take any decisive initiative. Whether political leaders will prove to their word and have the courage to address the issue remains to be seen. In any case, decision-makers should not let the Pandora Papers fall into oblivion, which had been the lot of the Panama Papers.
Source article :
ICIJ Website : https://www.icij.org/investigations/pandora-papers/
United Nations about tax evasion : https://news.un.org/en/tags/tax-evasion
IMF about the true cost of tax evasion : : https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-global-tax-havens-shaxon.htm
Source photos :
https://www.franceinter.fr/economie/pandora-papers-cinq-ans-apres-les-panama-papers-l-evasion-fiscale-se-porte-bien
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