Millennium Post

Paradise now lost

Paradise now lost
Life won't be the same for the rich and famous of the world, after Monday's global leak of 13.4 million documents – dubbed the Paradise Papers. Revealing the tax dodging schemes of the extraordinarily wealthy individuals and organisations – including the Queen's private estate, the Duchy of Lancaster, US President Donald Trump's son-in-law Jared Kushner and US commerce secretary Wilbur Ross, the papers expose how the super-rich have been squandering their funds in offshore havens to avoid facing liabilities in their home countries. It also sheds light on the aggressive tax evasion strategies of the multinational companies –such as Nike and Apple, the brands that are an integral part of modern society's landscape. The International Consortium of Investigative Journalists (ICIJ), which has spent several months working through the avalanche of data, feel that the Paradise Papers have exposed the worlds of political players, private wealth and corporate giants entangled in the offshore financial system. Till the recent past, the hidden web of investments, made by the super-rich, operated in the comforting dark offered by the enigmatic tax shelters. The light shed by whistle-blowing investigations, since 2013, has notably altered how the world perceives and regulates tax affairs. Last year's Panama Papers cost the leaders of Iceland and Pakistan their jobs and subsequently, many nations were virtually compelled to alter their laws and the offshore law firm at the heart of the Panama Papers closed offices across tax havens. The latest chunk of data centres the Bermudan law firm Appleby, as well as the Singaporean company Asiaciti Trust. As per the Paradise Reports, 714 Indian names feature in the over 13.4 million leaked documents from Appleby. Though it cannot be guaranteed that all the foreign accounts and foreign registered companies have forbidden money or business, it is good news in the battle against tax evasion and stashing away of wealth abroad. The government has taken the right decision to probe the tax evasion. But, it must not hamper the legitimate purposes for companies to create and operate offshore entities for corporate restructuring. Taxes, indeed, are the price we pay for civilisation. It is true of corporate entities as well as individuals. Worryingly, the international profits of many corporations are showing up in tax havens. It's no good for lawmakers to claim that the sharing of information would alleviate public anger. There's little evidence that the tax authorities have the resources to match with the global elite. The government could shrink the tax avoidance industry overnight. After several years of unrestricted private affluence and visible public misery, few would believe that the rich shift cash offshore for appreciable reasons. The public is cynical, apprehensive and disdainful; entirely justified as politicians have failed to take these revelations seriously enough, for years. The government needs to accelerate the probe process and its speedy completion. It is a common phenomenon that individuals and companies duck their tax liability by arranging their affairs with an intention to hoodwink the law. India is now enforcing general anti-avoidance rules to curb sharp tax practices, mainly in transactions structured overseas and the government needs to fix glitches in the domestic income-tax law to curb the menace of tax evasion. As a front-runner in the global battle against tax evasion after signing the OECD's automatic information exchange, India must make companies identify their real beneficiaries, like the other countries. The tax rates also need to be slashed down to make it as competitive as its global counterparts. The Paradise Papers has revealed a problem far more pernicious than the unethical conduct by tens of thousands of wealthy individuals around the world. Not to forget, humans would always have to cope with personal dishonesty. What the Paradise Papers show is how dishonesty is being promoted on a mass scale and how corruption is being institutionalised. It had also described what are supposed to be the windows of disclosure into the finances of high officials that are easily covered with blinds made by piecing together business laws from multiple jurisdictions. India needs a dynamic public debate about the need for rigorous rules on conflicts of interest, corruption and disclosure. Without it, dark money would rule the world, jeopardising our liberties and our fortunes. Time has come for the lawmakers to act in the public interest and tax evaders to realise that in this data-netted world, pulling the wool over the authorities' eyes is simply childish.
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