Important Lessons from Panama Papers case

Important Lessons from Panama Papers case

About 11.5 million papers shining a light on how some of the worlds richest hid billions of dollars to avoid tax were leaked containing information about the black dealings last year. The Panamanian law firm and service provider whose papers got leaked, Mossack Fonseca was creating illegal shell companies which enabled their users to hide business dealing. And this is Panama Papers incident.

The German reporter for the newspaper, Süddeutsche Zeitung was contacted by an anonymous source who asked if they were interested in access to 40 years worth of information and submitted encrypted internal documents from the Panamanian law firm. This information included details of holding companies and accounts related to dozens of prominent European politicians. This international project involved 400 journalists and 75 countries. The scale of the data dumped contained – 4.8 million e-mails, 2.1 million PDFs that ranged over a 38-year time frame – from 1977 to December 2015. This search noted that 95% of the companies involved in Panama papers were selling vehicles to avoid taxes.

This implies how a world’s business organization run by the leading firms and business officials runs a shadow economy consisting of the world’s leaders, business magnates, and media people conspire to conceal their wealth by creation of forged corporations called shell companies, which have no actual provision of goods or services and only exist on paper.

The journalists or investigative teams found business transactions by many important individuals in world politics, sports, and art, and many of the transactions are carried out for completely legal purposes and businesses are especially required to create offshore accounts when trading overseas. But the documents which included confidential emails, copies of passports, ledgers of bank transactions and even the various code names used to refer to clients — imply that the firm was connected to more than just creating offshore shell companies and accounts.

Related Topic: How changes in Income Tax Rates affect you

While a massive amount of information related to the shadow world of tax evasion and illegal money laundering was published, the info of Mossack Fonseca is just one of the many firms in the network of international tax havens. working to hide businesses of the global elite. With a recent study stating that almost $20 trillion has been evaded through creations of shell companies in offshore tax havens. Such instances provide major reasons behind the still largely prevalent global inequality.

But with the disclosure of the Panama papers Incident, people engaging in tax evasion and such companies are becoming exposed. So, to be on the better side of the law and on the moral grounds, to protect one’s integrity, one should surely file their taxes with the complete disclosure and in time. This one step could save your integrity and respect.

Simple and easy procedure to file income tax return online through ITR Software by Taxraahi.

By | 2018-08-08T07:17:48+00:00 September 20th, 2016|Categories: Income Tax Guide|0 Comments

About the Author:

Pulkit Jain is the founder of LegalRaasta – India's top portal for registration, trademark, return filing and loans. Pulkit is a veteran CA with over 10+ of experience.

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