International Consortium of Investigative Journalists (ICIJ) recently released the “Paradise Papers” which listed the names of many well-known, political and common businessmen from around the world.
You can read more about Paradise Papers here.
Federal Board of Revenue (FBR), in response to these leaks, has pledged to send notices to the Pakistani citizens involved in the matter.
ICIJ won’t share the data with any authorities of any country so if investigations are to go any further, FBR will have to do the work themselves. Haroon Akhtar Khan, Prime Minister’s special assistant, informed media that getting information about common citizens would consume time, however, details about famous personalities would be relatively easier to get.
FBR says that they will follow a similar pattern as they did with Panama Paper leaks and will send notices to those involved as soon as possible.
“We will adopt the same pattern used in the wake of the Panama Papers,” a source from FBR told the media.
FBR has a limited capacity to investigate old cases and cannot investigate cases that are more than six years old. On the other hand, we have already seen how FBR proved to be completely incapable of doing anything regarding people involved in Panama papers.
Former Prime Minister Nawaz Sharif and his family failed to defend themselves after the Supreme Court took notice of the issues and judged to file references against the family. Meanwhile, FBR failed to do anything in this regard.
Media Claims and ICIJ
ICIJ has told the media that they will release names of those who are holding a public office or have any public interest involved. Media is reporting that there are 135 Pakistanis involved in Paradise Paper leaks, however, officially only of 5 to 6 names have been revealed by the ICIJ so far.
Haroon Akhtar further said that media leaks or reports can only be used to identify those involved in the leaks but major hurdle in the way is getting details about them. As Süddeutsche Zeitung (SZ) journalists have taken the stance that no original documents will be shared with any government or state authorities.
Original Documents Won’t be Released
“SZ isn’t an accessory to state prosecutors or tax officials and working together with the state would violate journalistic principles. The state has plenty of means at its disposal to investigate problems revealed here.” SZ journalists told media when asked about whether original documents will be shared with authorities or not.
SZ is doing so in an attempt to protect its sources. “SZ will not publish all of the names that can be found in the Paradise Papers,”
The data from these investigations will be added the Offshore Leaks Database. Frederik Obermaier of Süddeutsche Zeitung (SZ) further told the media that Panama Papers and Paradise Papers were two different cases which differ in “both source and content”.
Some Big Names
Panama Papers came out as a result of investigations by journalists of ICIJ. Though the names in Panama Papers were nothing short of a shock, ICIJ says that,
In contrast to the Panama Papers, the present documents don’t just contain information pertaining to politicians, athletes and the super-rich, but also to numerous multinational corporations that use the offshore system. Among Appleby’s clients are companies like Nike, Apple, Facebook, Walmart, Allianz, Siemens, McDonald’s and Yahoo.
Legal Not Legitimate
Frederik Obermaier indicated that most of activity was legal,
Private persons who set up an offshore company, report it to the authorities and tax its profits don’t usually run into problems.
However, he said that if something is legal it doesn’t mean that it is legitimate or should be done. He explained about how loop holes in tax laws are used to avoid billions in taxes.
What Can FBR Do?
Organisation for Economic Cooperation and Development’s (OECD)
OECD is an option to officially request the countries in question about the required information, however, Pakistan hasn’t signed any agreements or treaties with the countries which are labelled as safe havens to dodge taxes. As per Haroon Akhtar, Pakistan has already asked these countries to share information but “We have not received any reply from these countries.”
Policy for Non-Residents
Former Pakistan Prime Minister Shaukat Aziz was also named in the recent Paradise Paper leaks. Shaukat Aziz is not a resident of Pakistan and as per FBR’s “relaxed” policies for non-residents, they cannot even send a notice to him.
Legal or Illegal
Firstly, FBR would have to determine whether the persons involved in Paradise Papers established the offshore companies legally or illegally.
As per law, a Pakistani resident can establish an offshore company and move the money there, after paying all the taxes on it. These companies can then be used for other business purposes. However, it is illegal to shift the money abroad without paying taxes and this move would be gauged as means to evade taxes.