The Pandora myth is a kind of theodicy, addressing the question of why there is evil in the world when Pandora opened a box releasing all the evils of humanity.
And “Panama” means an abundance of fish.
We had the Offshore Leaks in 2013, the Panama Papers in 2016, Paradise Papers (2017), and now, the Pandora Papers.
Loopholes in the law allow people to avoid paying taxes by moving their money offshore, or setting up shell companies, in tax havens.
The United Kingdom government stated that tax avoidance “involves operating within the letter, but not in the spirit of the law”.
Legitimate reasons include protection from criminal attacks, kidnapping, or safeguarding against unstable governments. But it is also the perfect way of hiding illegal proceeds from illicit activities, such as money laundering.
The International Consortium of Investigative Journalists (ICIJ) estimated that between US$5.6 trillion and US$32 trillion are hidden offshore.
The International Monetary Fund said the use of tax havens costs governments worldwide up to US$600 billion in lost taxes, each year.
The obvious use of offshore financial centres is to avoid paying taxes. A combination of lax regulation, and secrecy laws, make this possible.
It creates income inequality and widens the socio-economic gap between the rich and the poor.
Large corporations and wealthy individuals avoid paying their fair share of taxes. They deprive governments of the funds needed to provide vital public services and resources to help the poor.
As of 2021, the worst offenders were the British Virgin Islands, the Cayman Islands, and Bermuda. Even some states in the United States have no income tax.
ICIJ, with around 100 media partners, in 2016, released 11.5 million leaked files (or 2.6 terabytes of data) to expose offshore holdings of world leaders, politicians and public officials, across the globe.
Citizens hit the streets in protest. A CNN columnist said, “This is an earthquake.”
It brought promises of tax reforms and demands for resignations and investigations, as well as a flurry of explanations and denials.
Now, we have the Pandora Papers.
Politicians, celebrities, religious leaders, and drug dealers use shell companies in tax havens to avoid paying taxes and to hide their wealth. All perfectly legal.
Their greed and treachery in depriving the poor know no boundaries. And these shell companies, often layered in complex networks, conceal the identity of the owners and are without economic substance.
Sounds a lot like that kleptocracy case, doesn’t it?
After four exposés and trillions of dollars involved, isn’t it time to do a global crackdown?
Unfortunately, this will not be easy. It would involve crafting new legislative proposals to enhance tax transparency and eliminate tax evasion.
There should be a disclosure of tax payments and other key financial information on a country-by-country basis.
Anti-money laundering and corporate transparency measures would have to be tightened. Hiring new employees in an effort to fight against tax fraud would be justifiable.
The Panama and Pandora Papers introduced cross-border journalism to the world. Other vocations can emulate this.
Parliaments worldwide will be the agent of change to end the secrecy offshore. Governments of these offshore tax havens must also cooperate. Unfortunately, some are benefiting from it. So, there’s really no strong incentive to end it.
The G20, in addressing major issues such as international financial stability, climate change mitigation, and sustainable development, has a responsibility to tackle this issue.
Transparency International, with its remit to end the injustice of corruption by exposing the systems and networks that enable graft to thrive, is well positioned to lead this crackdown.
Accounting and tax bodies around the world have a big role to play, so too, the human rights organisations.
The Universal Declaration of Human Rights (UDHR) also needs a relook.
There’s bound to be fierce opposition from the banking industry, which will justify it by saying that this is a violation of privacy, and would create unfair liabilities on the banks.
If the rest of the world is against the hiding of trillions of dollars and limiting resources to help the poor, do we still bow down and just close the box?
This is the personal opinion of the writer and does not necessarily represent the views of Twentytwo13.