Editorial

Paradise is not for the poor

A year and a half ago Panama Papers were released and the fallout was catastrophic for individuals

Editorial December 26, 2017

The world moves on. A year and a half ago the Panama Papers were released and the fallout was immediate and in some cases catastrophic for individuals. Although not named in the Panama Papers, they were directly responsible for the downfall of ex-prime minister Nawaz Sharif. He had done nothing other than fail to disclose payments that his counsel argued he never received anyway. Today there is another leak, the Paradise Papers, and it is going to have nothing like the effect of its predecessor.

For the last year, the International Consortium of Investigative Journalists (ICIJ) have been trawling the 13.4 million files leaked from among others Appleby, a prominent offshore law firm with offices in Bermuda and elsewhere in the Caribbean. Unlike the Panama Papers, the Paradise Papers are not a logbook of serial criminality and deception. Far from it. More it is a list of where very rich people and companies and consortiums of companies put their wealth in order to reduce their tax burden. It is — so far but that may change — perfectly legal and above board to do this.

Tax avoidance — the legal usage of the tax regime in a single territory to one’s own advantage to avoid the amount of tax that is payable by means that are within the law — must be distinguished from tax evasion, which is not. This may seem a matter of semantics but it is not and any number of wealthy people are about to have their money movements exposed, including in Pakistan Shaukat Aziz who was finance minister during the Musharraf regime. The money managers for the Queen of England, for instance, invested GBP 10 million in offshore funds. Other famous names will be seen to have parked their cash in places where the taxman cannot reach. In the case of Mr Aziz, there seems little likelihood that his financial dealings are ever going to land him or his family in court. He spent a lifetime in the world of international finance and knew all about tax avoidance long before it became a talking point for those so poor as not to need offshore banking. We watch with interest.

Published in The Express Tribune, December 26^th, 2017.

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COMMENTS (1)

Toti Calling | 6 years ago | Reply Tax avoidance is allowed only if the country where the money was earned, tax was paid. Anybody having business in Pakistan, for example. must pay the taxes and is allowed to skip that if the money was earned in a different country. That is also immoral but acceptable. The poor, on the other hand, must pay taxes because such amounts are deducted from the wages. This does not look fair, but try telling that to the rich sitting in parliament.

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