Panama Papers helps recover more than $1.6B around the world

Panama Papers helps recover more than $1.6B around the world

First-time gains in Panama, France and Iceland have pushed above $1.6 billion the global tally of fines and back taxes resulting from the Panama Papers investigation’s exposure of the offshore finance industry.

On the third anniversary of the International Consortium of Investigative Journalists-led investigation, which exposed the secretive world of offshore tax havens, the fallout is gathering pace through hundreds of separate investigations into undisclosed wealth across scores of nations. The Toronto Star was a Canadian partner in the investigation.

Since June 2018, the United Kingdom alone has added $159 million to bring its total to more than $336 million; Australia has collected another $57 million to eclipse $123 million; and Belgium has added an extra $8.7 million to its government coffers to surpass $24 million.

French tax authorities have confirmed nearly $181 million has now been recovered — and that figure is expected to rise. They have carried out more than 500 inspections since April 2016.

Canada’s Revenue Agency, which also raided two properties last week in connection to the investigation, has revealed it had assessed $14.9 million Canadian in federal taxes and fines from 66 audits. The agency said it planned to audit about 234 more taxpayers linked to the probe. Fewer than 10 criminal investigations are ongoing.

“The audit work will take several years to complete as many taxpayers are using litigation to obstruct CRA audits,” a CRA spokesperson said.

On Tuesday, Senator Percy Downe questioned why no criminal charges had been laid since the CRA started beefing up its enforcement capabilities three years ago.

“Those who can afford to hide their money overseas do so without any fear of charges or penalties,” Downe said in a statement.

In Iceland, the Directorate of Tax Investigations has finished 24 investigations relating to the Panama Papers and estimates it has recouped $34 million. Icelanders took to the streets after the 2016 investigation was released, and the prime minister Sigmundur David Gunnlaugsson resigned just days after the first stories were published.

And in Panama, authorities have clawed back more than $18.7 million in the past three years.

Investigations are continuing in numerous countries including Austria (where regulators are examining whether two major banks followed procedures to prevent money laundering), Germany, France, and Norway.

ICIJ, together with the German newspaper Süddeutsche Zeitung and more than 100 other media partners, spent more than a year sifting through 11.5 million leaked files to expose offshore holdings.

The files, which were leaked to Süddeutsche Zeitung, came from a little-known but powerful law firm based in Panama, Mossack Fonseca, that had branches in Hong Kong, Miami, Zurich and more than 35 other places around the globe.

The $1 billion-plus Panama Papers’ tally almost understates total revenue raised as a result of the Panama Papers leak given that many countries do not disclose information on tax settlements.

In Poland, the task force set up after the Panama Papers has operated in secret. “It did not provide media with any kind of results, even off the record,” ICIJ’s Polish partner Vadim Makarenko told ICIJ.

While recouping the proceeds of hidden assets helps to fund vital government services, there is a growing sentiment that the enduring legacy of the Panama Papers will be its effect on behaviour and public attitudes.

Although many of the methods of evading tax detailed in the Panama Papers were legal, their use has since been widely condemned in the court of public opinion.

University of Leeds Professor of Tax Law Rita de la Feria says the Panama Papers has changed public sentiment towards taxation itself — and a failure to pay a fair share of tax is no longer considered a victimless crime.

De la Feria said: “Before the Panama Papers there was a public tolerance, a kind of ‘good for you’ attitude towards anyone who could avoid paying their fair share of tax.

“The Panama Papers has helped to shift this perception to one of ‘you’re robbing us of public services.’ The public didn’t fully grasp this reality before but it certainly does now.”

Contributors to this story: Emilia Diaz-Struck, Nina Selbo Torset, John Hansen, Minna Knus-Galán, Scilla Alecci, Johannes Kristjansson, Leo Sisti, Rita Vásquez, Monica Almeida, Jan Strozyk, Ulla Kramar-Schmid, Martijn Roessingh, Kristof Clerix, Marco Chown Oved, Jacob Borg, Juliette Garside, Anne Michel, Will Fitzgibbon, Vadim Makarenko, Alexenia Dimitrova, Emiliana Garcia, Andras Petho, Yongjin Kim, Frederic Zalac, Marcos Garcia Rey, Mathieu Tourlliere, Yasuomi Sawa, Colm Keena, Mariel Fitz Patrick and Ritu Sarin.

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