"The Panama Papers" is the monicker given to 11.5 million documents leaked to German newspaper Süddeutsche Zeitung by an anonymous whistle-blower. It is a Pandora's Box of detailed financial information from the database of Mossack Fonseca, an offshore law firm. While it isn't generally illegal to use offshore entities, some of the disclosures led to questions of tax avoidance and political corruption.
Heavy ripple effects ensued.
• Sigmundur Davíð Gunnlaugsson, Iceland's Prime Minister, resigned owing to revelations of conflict of interest over the fact that he and his wife owned an offshore investment company in the British Virgin Islands.
• The Finance Minister of France declared that the country "has decided to add Panama back on the list of uncooperative countries with all of the consequences that that will have for those who have dealings with Panama."
• Pakistan's Prime Minister Nawaz Sharif, facing calls for resignation by political opponents (Imran Khan, in particular) as a result of his family's undisclosed holdings in offshore companies, hurriedly left the country claiming to have had a doctor's appointment in London.
• Another prominent minister facing the heat was José Manuel Soria, who resigned as Spain's Minister of Industry.
• In Britain, Prime Minister David Cameron faced calls for an inquiry when the documents uncovered that his family held undisclosed wealth in offshore tax havens. On 10 April, he released information from his tax returns relating to the previous six years. And after that, a series of income tax publications followed - George Osborne (Chancellor), Jeremy Corbyn (Labour leader), Boris Johnson (the then Mayor of London), etc.
A blanket rule to bring financial details of all individuals into the public domain would certainly infringe on privacy rights.
On the other hand, in countries like Sweden, Norway and Finland all tax returns have always been publicly available for all to view (scrutinize). Advocates of the transparency policy often claim that when income information becomes a public document, citizens would be less likely to evade taxes for fear of relatives/ friends/ associates closely scrutinizing their returns. Also, such an open policy would pave the way for dialogues about the gender pay gap.
Widespread demands for making tax returns of politicians, among other financial elites, accessible as public information isn't new. But as legitimate as these calls for transparency may be, the matter of privacy should be considered too.
How much money a person earns, the amount of taxes they pay are, at the end of the day, their personal concerns. While exceptions can be carved out in the wake of a Panama Papers-esque situation, a blanket rule to bring financial details of all individuals into the public domain would certainly infringe on privacy rights. Equipping tax authorities with better resources, drafting and ensuring the execution of stricter tax laws would be a far better way to deal with the Panama Papers and similar situations.
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