Sunday, April 10, 2016

The shock of Panama Paper

A secret will be revealed someday. But if it has been shared by influential people, the impact of exposure to the secret will be strong.

Panama Paper was leaked by journalists on April 3, 2016. It was massive data reaching 1 TB administered by Mossack Fonseca, a Panama law firm, about the status of using tax haven by rich people and several companies.

CNN: The Panama Papers: 7 things to know

A tax haven is frequently utilized for people with high income to avoid paying corporation tax. It is well known that many international companies rely on tax haven more or less. However, the amount of money evacuated from the tax was an astronomical amount of money was found having evacuated from taxation.

In addition, several politicians are mentioned in Panama Paper. Vladimir Putin, the Russian President, Xi Jinping, President of China, and some other famous people are suspected to be concerned about this issue.

Russian government deems that Panama Paper was created to disrespect Putin. And China is eager to conceal this report from citizens with censorship on the internet. Prime Minister of Iceland had to resign because his family held funds in offshore shell companies.

The Washington Post: The Panama Papers made Iceland’s prime minister resign. Here’s why.

In the UK, David Cameron, Prime Minister of the UK, seats a difficult situation. He admitted having profited from the sale of shares in an offshore fund. Edward Snowden, a whistleblower in the US, is calling for his resign.

Independent: Edward Snowden urges British public to rise up and force David Cameron to resign over offshore fund

In Japan, there is a few people’s name clarified to be involved in this issue. Several companies are also concerned, but Japan government is hesitating to make an investigation.

It seems that personal use of tax haven is deemed more problematic than companies. The offshore funding itself is no more illegal. People are accustomed to this kind of management of money by the company. On the other hand, when a politician who is calling for raised tax is revealed to have saved taxation, he is likely to be criticized.

To be honest, I think corporation tax itself is nonfunctioning. The border of nations is gradually disappearing. It is difficult to track monetary flow precisely. Consumption tax is rather easy to control. Anyway, administration of a nation with gaining tax will be outdated.

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