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Follow the money
We deem hoarding wealth abroad while millions are impoverished wrong from a moral and ethical standpoint.
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Pandora's box: Allegations leveled in the Pandora Papers range from corruption to money laundering and tax evasion. (AFP/-)
I
s there anything better than having a lot of money? For some politicians, government officials and celebrities, the goal has been to keep more of that money and not pay any taxes. And it is this prospect that entices them to use offshore tax havens to hide assets worth hundreds of millions of dollars.
After reviewing some 11.9 million leaded documents from 14 financial services companies around the world, the International Consortium of Investigative Journalists (ICIJ) revealed in a report on Monday that global figures like Jordan’s King Abdullah II, Czech Prime Minister Andrej Babis, Kenyan President Uhuru Kenyatta, former British prime minister Tony Blair, as well as members of the inner circle of world leaders, had created and used shell companies to do business across national borders.
The document, called the Pandora Papers exposed how King Abdullah II created a network of offshore companies and tax havens to amass a US$100 million property empire from Malibu, California, in the United States to Washington, DC, and London.
Blair, meanwhile, took book-cooking to a whole new level by buying an offshore company that owned a multimillion-pound property in London that he was interested in purchasing — all so that he and wife Cherie could legally avoid paying stamp duty. This is undoubtedly a cynical move from a Labor politician who has been vocal about tax loopholes.
The report also claims that two senior ministers in President Joko “Jokowi” Widodo's administration were running shell companies overseas. According to the Pandora Papers, Coordinating Maritime Affairs and Investment Minister Luhut Binsar Panjaitan had roles in a company identified as Petrocapital SA, registered in Panama, while Coordinating Economic Affairs Minister Airlangga Hartarto, who also chairs the Golkar Party, reportedly owns two companies registered in the British Virgin Islands. The two used to be businessmen prior to joining the Cabinet.
None of this means, however, that the two senior Cabinet members committed any wrongdoings, as it is not illegal to have assets offshore or to use shell companies to conduct business across borders. It is also within the rights of these government officials to consider legal action to defend their reputation, if they feel that the Pandora Papers have compromised their image and good standing.
Legally, there’s little that law enforcement can do because as long as there’s a sovereign entity in the world that continues to operate under a tax-free regime, this practice of shipping money offshore will continue.
But we deem hoarding wealth abroad while millions are impoverished wrong from a moral and ethical standpoint.
The practice is all the more egregious considering that the Finance Ministry is literally scraping the barrel to find cash from any sources available to pay for the ballooning state budget, which demanded a greater infusion of money to pay for COVID-19 economic relief programs, as well as foot the bill for healthcare spending.
At a time when the private sector is struggling to stay afloat, we need the government to play an active role in jumpstarting the economy, and it needs all the money it can get to pay the bill. The Pandora Papers can give the government a clue on where to look.
