We think we master every
aspect of the global economy, including the finance industry. But, there are
still shadowy zones… Who are the tax dodgers? Who are their accomplices? Where
does the money go?
The Panama Papers have
uncovered part of this opaque world and exposed the mechanisms of tax evasion
and money laundering. According to the consultant Clayton M. Christensen, the revelations
in the “Panama Papers” are just the tip of a much bigger iceberg…
11,5 million documents
were released by the International Consortium of Investigative Journalists. It
involves Mossack Fonseca, a secretive law firm that specialises in setting up offshore
companies. An offshore company is a company located in a tax haven. The offshore
financial institutions are often used for illicit purposes (money laundering
and tax evasion). In parallel, tax havens are defined by a high level of
secrecy, a weak commitment to international cooperation and sharing
information. More importantly, their tax rate is equal to virtually zero.
The “Panama papers”
concerns 140 current and former politicians, with 12 heads of state. The rich
and powerful use law firms, offshore shell companies to hide their assets. In
addition, criminals can also exploit tax haven schemes. A shell company has the
outward appearance of being a legitimate business. But it is just an empty
shell. It does nothing but manage the money in it, while hiding who owns the
money.
The economic damage is
huge: billions of dollars have been hidden. No taxes were paid. Express
Newspapers estimates that the UK could be losing up to £7.2 billion a year of
tax revenue.
I think we have to make
sure that the rich pay taxes like everyone else. A public register of the owners
of offshore companies, country by country, could be a solution.
Links:
Paul
DE LA GRAVIERE wants to work as a financial consultant.
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