Monday June 17, 2024

Preventing tax evasion

By Abdul Sattar
October 06, 2021

The startling revelations of the Pandora Papers have created a political storm across the world, leading to calls for action against those who hide their assets, avoid taxes and carry out unfair practices for protecting their wealth.

Around 11.9 million files have exposed how some elites dent their so-called impeccable reputation and how their actions fly in the face of their tall claims of making money through fair means. Besides exposing the secret wealth of more than 100 billionaires and over 300 public officials of the world, the papers have also shed light on how some alleged narcotics businesses have benefited from these tax havens.

The papers show that when it comes to avoiding taxes or protecting money from public scrutiny, celebrities, generals, judges, mayors, donors, businessmen, politicians, bureaucrats, government ministers, companies’ executives and media moguls stand in the same line. They all benefit from a global system that is corrupt to the core and that protects the money of the rich and grinds the poor under the heavy burden of taxes.

This system has devised sophisticated ways to stash money in places that do not have strict tax regulations. This is not the first time that the rapaciousness of global elites has been exposed; such revelations were made in the past as well. Unfortunately, then, not enough steps were taken to prevent tax evasion. Had governments around the world succeeded in collecting taxes on the money kept abroad and spent it on the people, millions, or possibly billions, of people across the world could have benefited from it.

In 2016, the Panama Papers also revealed the names of many people from global rich and super rich clubs. A hue and cry was made for the time being, but then things returned to normalcy. The oligarchs of the world busied themselves doing mundane things while the majority of the people eked out a living – unable to launch any political agitation against these unscrupulous people who make billions through complex legal practices.

Those who believe that the just distribution of wealth can be carried out by taxing the rich might have been shocked by the latest stunning disclosures. Their naive belief in the transparency of the corporate world might have been shattered. But those who have an eye on the history of corporate rapaciousness know well that wealth cannot be accumulated without exploitation and some levels of unfairness, duplicity and manipulation.

Such gullible people assert that through strict legislation, business malpractice can be avoided, ignoring the fact that in both the West and the East, laws are made by parliamentarians who belong to different political parties which are funded by corporate lobbies, business groups and a myriad of other actors who force these so-called public representatives to make laws in a way that protects their interests. The current papers have exposed not only politicians but also their unscrupulous donors. From the Conservative Party of the UK to the PTI of Pakistan, every political party stands exposed with the disclosures revealing the notorious nexus between political parties and their donors.

According to a Greek philosopher, justice means protecting the interest of the stronger. Another saying asserts that justice is like a spider’s web where the poor get entangled, and the rich tear it down. The recent revelations prove that the world’s legal system is designed to protect the powerful. In modern times, the strong and powerful do not necessarily have to possess lethal weapons; it is the power of capital, the most potent tool today, that protects them from all sorts of accountability and scrutiny.

Before these papers, there were conscientious journalists, media persons, researchers, politicians, authors and activists who talked about the accumulation of money by global elites and their tax evasion. For instance, US Senator Bernie Sanders has explained, several times, how top US companies pay almost no tax while the US state keeps squeezing the working class of the second largest democracy by imposing more taxes on the people.

Ironically, some of the super-rich who do not pay enough taxes or avoid raising workers’ wages demanded a state subsidy for their extravagant space trips. But, unfortunately, Sanders’ revelations and his demands for the imposition of more taxes on corporations remain unnoticed. No one raised a loud enough voice to hold those who pay almost none to little taxes responsible. The super-rich were allowed to enjoy the support of states that turned a blind eye to their unscrupulous practices.

Global leaders have now vowed that they will carry out reforms that may help put an end to this tax evasion and strengthen public scrutiny. Some of them, including Prime Minister of Pakistan Imran Khan, have formed committees to further probe into the matter, bringing those whose names have been featured in the papers to face the law if they have committed any violations. But people across the world are asking about the committees that were formed in the aftermath of the Panama Papers.

How many people who were included in the Panama Papers were made to face inquiry or questions from the public? Where are the details about the proceedings and the subsequent outcomes of such committees? Were the people who evaded taxes through stashing their money in tax havens penalised or fined? Did governments collect any taxes that were evaded?

These questions might sound bizarre, but they need to be answered if the principles of transparency really hold any value. The real problem does not lie in only stashing money, but in the laws that protect such theft in one way or another. If tax evasion and avoiding public scrutiny is bad, why shouldn’t we abolish these tax havens altogether? After all, it is not the assets of the poor working class that are protected here, but those of the rich. The people can pressure their elected representatives and political leaders into enacting legislation that declares such acts illegal altogether. As long as they exist, nobody can prevent this form of tax evasion.

The West that claims to be transparent and fair should come up with a mechanism aimed at abolishing these tax havens. The working class of the advanced capitalist world has a special duty of launching a massive movement that could force their leaders to agree to such legislation.

If such havens are abolished, it will help the people of not only the developed world but also of developing countries. Efforts should also be made to prevent the transfer of trillions of dollars from the Global South to North. Western ruling elites and their corporate media only highlight the corruption of third world countries’ leaders and fail to rein in companies from the developed world that extend favours to such leaders.

Resultantly, sometimes these leaders are punished, but those who come up with the idea of exchanging favours remain free. The Pandora Papers underscore the need to make everything public. From the proceedings of parliament committees to the actions of intelligence agencies, from business methods of corporations to strategies of companies, everything should be made public. The fear of public backlash and the abolition of tax havens are some of the ways that can put an end to such unscrupulous practices.

The writer is a freelance journalist.

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