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Tax Privileges Undermine Tax Equity
The Pandora Papers reiterate how tax havens continue to derail the global tax system.
Issues of tax equity have bounced back into focus after the recent outing of the documents listing the rich and influential persons with offshore shell companies registered in tax havens. These tax havens are offshore as they are registered outside the home country of these investors, and these are shell companies as they do not normally engage in business activities but only serve as a wrap-around on individual or corporate assets to obfuscate their real ownership.
Called the Pandora Papers, these documents—ferreted out by the International Consortium of Investigative Journalists (ICIJ)—refer to around 12 million leaked files of 14 corporate firms who have set up 29,000 shell companies and private trusts that can hold assets in tax havens. These shell companies and trusts are mainly used to stash away secret assets—mainly cash, securities, or real estate—from the prying eyes of either tax collectors or regulators and creditors.
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