Here we are again after Panama and Paradise papers, Pandora papers reveal the scandals of the filthy rich. Being rich is not easy!! (along with hiding it)
In what is termed as the biggest ever leak of offshore data. Pandora Papers exposed the hidden assets of some of the world’s wealthiest and most powerful personalities. It reveals how the ultra-rich people across the globe create a web of complex trust structures for estate planning which are least regulated for taxations.
This global investigation is based on the leak of 11.9 million files from 14 global companies hired to build about 29,000 offshore infrastructure projects and private trusts in tax havens such as Panama, Mauritius, Singapore, Switzerland, etc
The pandora papers were leaked by the Consortium of Investigative Journalists (ICJ) based in Washington. It shared leaked statistics with the BBC Panorama, the Guardian, the Washington Post. The Indian Express had input in the investigation of Indians.
Over 100 billionaires have made it to the list. It features world leaders, politicians, government officials, celebrities, business icons. Prominent powerful people like Russian President Vladimir Putin’s close associate Konstantin Ernst, Czech Prime Minister Andrej Babis, Tony Blair, King of Jordan are among the many wealthy individuals.
Some of the Big names in every Indian household like Sachin Tendulkar, Anil Ambani, Jackie Shroff, Kiran Mazumdar-Shaw are a few among the 300 Indians featuring in the list.
Pakistan’s Prime Minister Imran Khan’s present cabinet ministers including his finance minister, in addition to his former ministers, made their way into the list.
What are tax havens and why are they so desirable?
Tax havens are countries that levy a minimal or no tax to foreign businesses and individuals. Therefore, they are ideal places for wealthy people to stash all their money earned elsewhere. Thus avoiding higher tax payments and hiding illegal money.
The objective of doing this is simple. It helps them to hide their real net worth so that they can evade taxes from tax authorities. Hence Investments in tax havens are a viable option for them to secure their financial investments, real estate, shareholding, aircraft, and much more.
What are offshore trusts?
We need to understand how offshore trusts offer secrecy to private individuals. For example, if a businessperson sets up private offshore trusts, it does not reflect in his private assets. It creates a degree of separation in a way often overlooked by the tax authorities.
To avoid taxation, businesspersons transfer all their assets to a trust. The ownership of the assets now remains with the trust. Therefore businesspersons being only a beneficiary are not liable to pay taxes on income from the trust
Through these trusts, the rich stack all their illegal money and hide incomes to evade taxes. In this way, they protect their wealth from law authorities. It also keeps it away from the radar of creditors to whom money is due.
Under the envelope of secrecy laws, criminal activities especially terror funding, drug trafficking, and human trafficking are encouraged through these trusts and tax havens.
What is the government’s response on pandora papers?
The finance ministry in a statement has assured that an investigation will be conducted into the important revelations uncovered by the Pandora Papers. Followed by necessary action as per the law.
The government will also cooperate with institutions abroad to access any scrap of information relevant to the inspection. In addition, the ministry said that India will collaborate with foreign jurisdictions to ensure effective actions in such tax information leaks.
India already has Black Money (Undisclosed Foreign Income and Assets) and the Imposition of Tax Act,2015 to counter tax evaders, money launderers, and terrorism funding. Moreover, some of the names exposed by Pandora Papers are not surprising to Indian investigating firms. The Indian government as of now will scrutinize the revealed data at the earliest. However, how will it eliminate such loopholes and laxity in our tax regime remains open to discussion.
Keep reading at: https://akashbaani.com/why-pm-modi-said-that-he-misses-critics/