The leakage of mammoth archive of ‘Panama Papers’ has disclosed around 11.5 million confidential files or 2.6 terabytes of data of more than 214,000 offshore companies, have left the citizens aghast. The documents have invariably stripped the unapproved cache of wealth accumulated by the public officials all over the world for over more than three decades. What is Panama Papers? Before we probe into the papers of Panamian Law firm- ‘Mossack Fonesca’, let us briefly understand the aforesaid subject lucidly.
The rich bureaucrats, wealthy politicians and celebrities park their money in tax haven thereby avoiding the public scrutiny of their monetary possessions. The term ‘tax haven’ means a country or independent area where the taxes are levied at a lower rate.
Well, now the question arises why the officials and filthy rich politicians need to invest in offshore shell companies? Are they secretly indulging into money laundering activities? Are they intentionally dodging the taxes of their own nation? Browsing through the studies, the daunting revelation shows that there are plethora of legitimate reasons including tax evasions, safer depot of illegal wealth, business with rogues, terrorism and so on. These unanswered questions have made the government in and across the boundary, to delve deeper into the encrypted data because, the companies involved are black listed by the United States for allegedly trading with crooked states, terrorists and drug barons.
Initially, the first investigation report was published by the International Consortium of Investigative Journalists (ICIJ) which was acquired from an anonymous source. The report unveils the eminent names like President Vladimir V. Putin of Russia, David Cameroon of Britain, who claims to be profited from an offshore trust, relatives of President Xi Jinping of China, President of Transparency Chile, Prime Minister of Iceland, Salman, King of Saudi Arabia, and many others. On the flip side of the episode, holding an offshore account is not illegal providing that the officials are not indulging in any sort of unethical practices of commerce and trade.
The phenomenon has not only shaken the global economic system but also questioned the rooted financial corruption in the world economy.Consequently, for the Indian government, it will demand a more complex and stringent tax structure thereby making the financial transactions more transparent for the much needed affluent nation and conscientious globalisation of the economy.