Photo courtesy of ICIJ
Five years after the Panama Papers, the fight against offshore crime has a long way to go. Governments around the world have recovered more than $1.36 billion in back taxes and penalties, including $185 million in the last 2 years; however, the recovery in Canada is very low.
In the largest journalistic investigation in history that uncovered the amounts of money hidden in tax havens by leaders, gangsters, athletes and celebrities, the Tax Agency of Canada (CRA, for its acronym in English) reported that it has found irregularities in 35 cases but has not brought a single criminal charge against anyone.
Experts have recognized that there has been progress in the fight against dirty money but that much more is needed. Lakshmi Kumar, Policy Director at Global Financial Integrity said: “Policymaking is not an overnight process; you have to keep pushing.”
Kumar explained that beginning with the Panama Papers, a debate began on how to crack down on government officials, bankers, and corporate facilitators of the offshore system who evade taxes.
Toby Sanger, director of Canadians for Tax Fairness, an organization in charge of promoting tax equity, said in a statement that since the publication of the Panama Papers, Canada has seen very little compared to what has happened in other countries. .
Sanger added that the CRA said its investigation identified about 900 Canadian individuals, companies and trusts from the Panama Papers. An initial evaluation of those taxpayers determined that around 60% of them; that is, about 540, complied with their tax declaration obligations, so it was not justified to carry out an audit.
Among the remaining cases, by the end of 2020 about 200 audits had been completed, while another 160 were being carried out. Of the audits completed, 35 cases resulted in the application of new taxes or penalties totalling $21 million, said the Tax Agency of Canada, clarifying that the fact that a name appears on the Panama Papers does not imply necessarily non-compliance with Canadian tax laws.
More than money
The impact of the Panama Papers extends far beyond the recovery of lost tax revenue. Authorities in several countries continue to investigate civil and criminal cases for alleged money laundering, fraud and other charges.
The publication of the Panama Papers, which occurred on April 3, 2016, was one of the largest financial records leaks in the world. More than 11.5 million documents from the Panamanian firm Mossack Fonseca were leaked and reached the German newspaper Suddeutsche Zeitung. This led to a collaboration with the International Consortium of Investigative Journalists (ICIJ), which initiated the analysis of the documents.
Mossack Fonseca was a Panama-based law firm with more than 40 offices around the world. This entity worked with some of the largest financial institutions in the world, such as Credit Suisse Group, UBS, Deutsche Bank, HSBC, Société Générale, and the Commerzbank.
The leaked documents made public both the existence of assets as well as shady tax deals in which some twelve heads of state appeared who were in office at that time, among them the Russian Vladimir Putin, the Chinese Xi Jinping, the Argentine Mauricio Macri, the Mexican Enrique Peña Nietoo and the King of Morocco Mohamed VI. There are also names of famous athletes such as Lionel Messi, businessmen, actors, and even writers like Mario Vargas Llosa.
By Silvia Méndez
