The war on rampant tax evasion may not be hopeless after all crossy road hack ios and android.
It might not look that way after an enormous leak of documents from a Panama law firm suggesting that prominent figures worldwide have used offshore companies to hide billions of dollars. The “Panama Papers,” as they are known, seemed to underscore how hard it is for national governments to collect the taxes they are owed.
Soon after the financial crisis of 2008, governments agreed to do more to crack down on offshore tax evaders. The eye-popping articles this week — including a report linking a musician friend of Vladimir Putin’s to offshore companies — imply that countries are still struggling to keep up. It is unlikely that any amount of international cooperation can stamp out tax evasion in countries where corruption is entrenched and leaders need ways to conceal their wealth. What is more, the financial industry is well practiced at finding ways around new rules.
Yet there are signs of progress. And with a tougher legal line, and the introduction next year of new international data-sharing measures from the Organization for Economic Cooperation and Development, the authorities are counting on lasting victories over the evasion industry http://www.thesimpsonstappedouthackss.com/.
Pascal Saint-Amans, director of the O.E.C.D.’s Center for Tax Policy, said it was significant that the documents came from Mossack Fonseca, a law firm that helps individuals set up offshore companies and is based in Panama. According to the O.E.C.D., Panama has not met its transparency recommendations, which could make it attractive to people leaving offshore centers in countries that did choose to comply with the O.E.C.D. measures.
“You have a drop in offshore business, but a concentration of the bad business in Panama,” Mr. Saint-Amans said.
He added that, since 2011, around 20 governments have collected some $50 billion in additional taxes as a result of the anti-evasion efforts.
Vladimir Putin with Sergei Roldugin, left, a longtime friend. Mr. Roldugin, a cellist, is a shareholder in some of Russia’s biggest companies, according to the Panama Papers. Credit Pool photo by Dmitry Astakhov
Even the documents reported to be from Mossack Fonseca showed a decline in the number of offshore companies set up by the firm. Ten years ago, the number was around 13,200; in 2015 it was just over 4,300.
Gabriel Zucman, an assistant economics professor at Berkeley, urged caution about drawing any strong conclusions from the decline in Mossack Fonseca companies. “This is just one country,” said Mr. Zucman, the author of “The Hidden Wealth of Nations,” which explores how offshore centers have enabled tax evasion and tax avoidance.
Mr. Zucman’s book, published last year, asserts that Switzerland and Luxembourg remain powerful magnets to money seeking anonymity. And he argues that efforts relying on bankers to report data, as the O.E.C.D.’s approach does, are likely to fall short.
But he acknowledges that progress has been made. In 2010, Congress passed the Foreign Tax Compliance Act, which requires foreign banks to share information with the Internal Revenue Service about accounts of United States citizens, and imposes financial penalties if they don’t. Mr. Zucman has said that the law seems to have been a deterrent, contending, however, that countries continuing to hold out may need to face far tougher measures, like tariffs visit this.
The O.E.C.D., for its part, argues that its data-sharing initiative, once up and running, will be effective. Its program asks banks to share data on foreign clients, in theory enabling tax authorities to identify the actual person using an offshore account or company.
Mr. Zucman is skeptical that the bankers will sufficiently comply. “They have been serving criminals and tax evaders — and they’ve being doing that for decades,” he said.
But the crux of the new strategy is that the onus for detecting evaders will fall on the governments themselves — which will then have more information and presumably have the greatest incentive to claim the missing taxes.
If in future cases governments discover that the banks held back information, the authorities might decide it makes sense to be tougher than they were in recent cases against banks that assisted tax evasion. In 2014, the United States obtained a criminal conviction against Credit Suisse, which pleaded guilty to aiding tax evasion and paid $2.6 billion in penalties. That sounds like a lot. Yet the bank’s chief executive said at the time that the punishment did not have “any material impact on our operational or business capabilities jetpackjoyridehackss.com/.”