The Panama Papers constitute one of the biggest-ever leaks of confidential or secret information, surpassing in volume alone that made by Edward Snowden.
The papers were leaked from a Panamanian law firm called Mossack Fonseca and in 11.5 million documents there is a trove of information as to how the world’s richest people have concealed their money in offshore companies in order to avoid taxation.
Over 200 people of Pakistani origin are on the list and there are some very big names indeed. The leak and the subsequent analysis by the International Consortium of Investigative Journalists and the German newspaper Suddeutsche Zeitung has made headlines around the world, but in the case of those named as from Pakistan, which includes individuals belonging to the prime minister’s family, it has done nothing — so far — to uncover any wrongdoing or criminal activity.
Very wealthy people have attempted to avoid taxation since time immemorial. So-called ‘tax havens’ were developed to service this need as well as provide significant revenue for the countries in which they are legally based. There is nothing inherently illegal about operating a tax haven nor anything inherently illegal in taking advantage of the relief from taxation they offer. But it is also true that tax havens can be and have been used for criminal purposes, providing a parking place for ill-gotten gains and laundering dirty money.
They offer a cloak of invisibility to those using them. While there is no evidence so far that any of those named in Pakistan have done anything other than what very rich people do worldwide when they avail themselves of tax-haven services, it remains doubtful whether there will ever be any impartial investigation within the country that could confirm this.
Hiding one’s wealth may not be a crime per se but it does give rise to suspicion and doubt as to motive and if those who rule us are in any way found linked to such activity, they have to face and answer the uncomfortable questions they are confronted with.
These revelations may not confirm any criminality but they do sit uneasily in terms of the fact that the ruling classes of Pakistan have used tax havens for decades whilst presiding over a desperately poor country, where the tax burden is unfairly borne by the salaried and working classes while the super rich conveniently avoid paying their share.
Published in The Express Tribune, April 6th, 2016.