Pandora Papers – A very fancy-sounding phrase that came across our news feeds in the last few days. But what are the Pandora Papers? Is this in reference to the Pandora’s Box- A mysterious container in Greek Mythology, which, when opened, released curses upon the world? Maybe, in a metaphorical way, yes.
The Pandora Papers leak that came into the spotlight on October 3, 2021, is a leak of close to 12 million documents that reveals offshore assets and deals of billionaires, world leaders, and public officials. It is described as one of the biggest ever leaks of financial records and was obtained by the ICIJ- International Consortium of Investigative Journalists from many different financial and legal services firms. The last leak that came remotely close to this magnitude was the Panama Papers leak.
What do the documents contain?The 11.9 million documents leaked, which comprise 2.94 terabytes of data, show all the transactions, deals, and offshore assets carried out by the wealthiest of the wealthy in order to avoid their tax liability to their countries. The names of reputed celebrities, politicians, current world leaders, former world leaders, and famous figures have been found in this Pandora Papers leak. The wealth and money that is thus transferred out of the country are stored in certain ‘tax havens’ to minimize and, if possible, entirely avoid the tax payable on the money. This incident of tax evasion through tax havens has now come to light due to the collective and constant effort of more than 600 journalists in close to 117 countries.
What is a ‘tax haven’?A tax haven is a place outside the country’s jurisdiction, which has low tax rates and enables the investors to effectively hide their money from the tax authorities of their own country. These tax havens are situated worldwide and are especially used when the rich feel the need not to disclose the existence of a certain amount of money or the way it came into their possession. These countries have specific laws that do not dictate the need to disclose the owners of any companies or firms in their jurisdiction. Shell companies- empty or dormant companies that are often used to facilitate this tax evasion are located densely in these tax havens. A few examples of known tax havens are the Cayman Islands, Singapore, Switzerland, and Hong Kong. The Pandora Papers have shown a way on how the rich become richer.
What is uncovered in the Pandora Papers leak?The leak reveals almost 3 million images, more than a million emails, and close to half a million spreadsheets. The records exposed how some of the most influential and powerful people in the world used and are still using secret offshore companies situated in various tax havens to hide their accumulated wealth. A few specific and huge numbers have also come into light, like details of the owners of more than 1,500 UK properties and land bought with the help of offshore companies. This list also includes the names of individuals who have been accused of being involved in corruption. Many prominent public figures were mentioned in these papers, which has shocked the general public, and news channels have been having a field day. While these are only investigations, it still comes as a surprise that such wealthy and influential people are trying and avoiding their tax liability duties towards their nation.
What can be the consequences?In most countries, it is not illegal to own and invest in offshore companies for business purposes or otherwise. The leak, however, has resulted in immediate bad publicity for the concerned parties; however, many of their respective spokespeople have promptly given statements of clarification, thereby reducing collateral damage. More severe investigation might follow the findings, but it becomes difficult for the investigators to pursue the information-heavy secrecy, political alliance, and many more obstacles. If the investments are found to be illegal money or to indulge in illegal activities, then action will be taken against the individuals.
The Pandora Papers were being worked on by journalists for almost two years. There will always be constant vigilance on the part of the legal authorities to detect illegal and suspicious activities in the future. However, it is the responsibility of every citizen to provide to the nation what is owed to it dutifully. Taxes are for the country and for the country’s citizens, and every citizen should answer to the call of the nation.