Panama Papers Are Much Ado About Nothing

843 views Published on 11th April 2016

The "Panama Papers" are much ado about nothing. These are tax papers that were leaked from a Panama law firm that contains millions of pieces of information about the tax behaviour of the rich and famous who transfer their wealth principally in currency form to tax havens including Panama. The reaction of the world to these documents is what is most surprising and distressing and not the existence of these documents.

Firstly, not one journalist or government has reported that these tax havens in which the rich and famous from the US, UK, France, Russia, China etc sock their money are criminal enterprises though they should be so labelled. Neither has there been any reference to the rich and famous who stash their money in these tax havens as engaging in tax evasion, (a criminal offence) and therefore committing organized criminality, though they should be called organized criminals.  They have merely been referred to as participating in tax avoidance, a perfectly legal scheme precisely created by governments of the entire world for the benefit of the rich and famous and their descendants and vehicles like multinational corporations.

It is so hypocritical for world governments and media to pontificate and brow-beat themselves to a pulp, like a wronged King Kong,  mourning about the "Panama Papers" and the rich and famous taking advantage of these specially government-created tax loopholes! In most tax codes of the world, there are all types of exceptions permitting people to organize their affairs so as to defer, minimize or avoid taxation at all.

The wealthy including legislators, movie actors, entrepreneurs like Trump etc hire expensive tax lawyers and accountants to arrange their affairs so as to defer, avoid or minimize tax obligations. Western tax codes created tax havens. Swiss legislation permitted bank secrecy laws which allowed African, Latin American and Asian dictators to steal money and stash it in Swiss banks. Thousands of US wealthy businessmen held secret accounts in Swiss and other banks. It was mostly legal. Of course, some in the process of tax avoidance engaged in tax evasion - but governments were all aware if these shenanigans. They created it through legislation in the first place.

Has any government in the west been prosecuted for permitting Mobutu, Abacha, Marcos, Noriega, shansonga, Bokassa and Museveni  to steal money and deposit it in Swiss or Panama banks provided for in western legislation? When these dictators die, trillions of dollars repose to the benefit of Swiss banks and people or US and other western governments as the case may be. Do they raise any noise equivalent to the crescendo accompanying the so called "Panama Papers"? Not in your bank.

Regarding the creation of tax havens, of course I am aware that the road to hell can be paved with good intentions. Governments didn't know that they were creating a monster. However, they were aware that these schemes were created for the benefit of the rich and famous - for themselves as well and for their use. Conservatives still pine for low taxes for the wealthy. Trump and Cruz are talking about it right now. Low taxes for the wealthy is not any different from tax havens. The wealthy and multinational corporations benefit from tax subsidies in the trillions every year.

Ever heard of the concept of "corporate welfare?" Who did the bailouts in the US in 2008 and 2009 mostly assist? Corporations! To the tune of trillions of dollars. Tax havens galore in the heart of the US. The poor continued to be on food stamps.

Corporations  in so called developing countries are mostly tax exempt or openly avoid paying tax through government legislation or transfer pricing. These countries are tax havens for western multinational corporations as well. Do you hear western countries whining about this tax avoidance-cum-tax-evasion? Not in your books.

Governments especially western governments go on pontificating and creating laws about money laundering by criminal gangs and terrorists when the biggest organized criminals are governments themselves and then fake surprise when the so-called "Panama Papers" are leaked!

Get over it. This is much ado about nothing. You create a loophole, lawyers and accountants will be used to create vehicles for its exploitation by the rich, wealthy, famous and government functionaries. By Senators. By British PM's wealthy father. By Putin and Chinese leaders. Forget about Panama. Talk to Washington DC, London, Geneva, Zurich, Paris, Brussels, Beijing, New York. They have the answers to tax avoidance and evasion. They created the laws. They are the organized criminals along with terrorists and non-state organized criminals.

By Dr. Munyonzwe Hamalengwa              

The author teaches law after practising law for 25 years. He can be reached at  forthedefence@yahoo.ca


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