Panama: Time to End the Tax Avoidance Charade

These tax havens are often used for money laundering the gains of other criminal activities. Tax evasion and wider criminal activity all too often go hand in hand. But whilst it may be getting harder to hide wealth, the jolting truth from the latest revelations is that it is evidently still not hard enough.

We should take the massive leak of legal documents from Panama - 11.4 million of them - as a call to global action. Finally.

As the jaw-dropping revelations about wealth being sheltered from tax authorities around the world sink in, so do the implications: Elites worldwide are running rings round often severely stretched tax authorities and, sometimes, complicit governments that they may even run.

Aside from all the fronts and fast living clearly being facilitated from brass plaques on Panamanian doors, there is another even more startling fact: This dump of data all came from the case load of just one law firm operating in one tax haven.

We need to stop allowing 'sophisticated' tax planning from allowing some people to hide assets and not pay their dues. The amount of those dues should be a matter for law, not moral judgements. But they exist.

The basic building block of that change must be for ownership of assets to be visible and beneficial owners clear. None of this is happening at present in an enforceable way.

Plenty of those attached to the revelations from Panama are the families of world leaders, but most are not. At least two members of the House of Lords and our own Prime Minister's family, for example, appear to be caught up in the scandal, or at least in a blizzard of denials that they are.

One thing that is very visible is the large number of tax havens around the world still, an embarrassing number of them UK dependencies.

It is one thing for a tiny nation (and aren't they always?) to offer tax breaks as a revenue raising ruse, quite another for the governments of the rest of the world to allow its citizens to use them. Those with small nation complexes should be encouraged rather more seriously to develop, say, tourism or crops or industry - much like everyone else, in fact.

Whilst we may live in a globalised world, where money can disappear with the click of a mouse between jurisdictions, that is no excuse for taking everyone who is less elastic with their cash as mugs. We still expect governments to champion clear global regulations for fair and transparent tax collections.

Instead, we're getting plenty of talk about crack downs, the odd conference, and some mild tinkering with the rules, but all still easily mitigated by a good tax lawyer or accountant.

Big statements of intent, such as the General Anti-Abuse Rule in the UK, are no good if there are not enough tax troops on the ground enforcing them, bringing cases to trial to help define them. Similarly, the Common Reporting Standard due in force next year will allow tax authorities agreed by 47 leading countries to share data easily about individuals, but only when someone asks for it.

The UK Government, to be fair,has certainly talked the talk on tax avoidance, giving us a carefully calibrated 'moral' measure against which its legitimacy can be judged.

But the walking bit is still a stumble. And it isn't just about individuals. The embarrassing gratitude with which Google's largesse at offering to pay £140 million in UK back taxes - about 10 per cent of what the French authorities are demanding - was received by George Osborne, the Chancellor, shows just how far there is to go in attitudes and action.

Meanwhile, perhaps we can expect more data leaks, and possibly from tax havens closer to home and let us not forget that tax avoidance or evasion may not be the only motive for using tax havens.

These tax havens are often used for money laundering the gains of other criminal activities. Tax evasion and wider criminal activity all too often go hand in hand. But whilst it may be getting harder to hide wealth, the jolting truth from the latest revelations is that it is evidently still not hard enough.

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