A day ago, many big shots from across the globe were exposed regarding the topic of tax evasion. Around 2.6 terabytes of documents were leaked by a world renowned firm to the International Consortium of Investigative Journalists by Mossack Fonseca.
It’s not rocket science to understand the situation over here. In simple words, governments of different countries have a rule of how much money they can take to foreign lands per year. And they also have a policy regarding setting up or incorporating companies over there. It will be a pretty long day explaining about each country’s policy. Since am a resident of India, i shall have my take over here.
Until 2004 Reserve Bank of India had a policy that they should not allow the rupee to take anywhere outside the Indian teritorry. After much discussions with the rich lads and considering the globalization into the frame, RBI decided to allow 25000$ per year per Indian resident. You can do literally whatever you want with that money. Even go and dump it in the grand canyon. But Indians were denied of incorporating companies with that money. The limit went on increasing year by year and the current limit became 250000$ per year per Indian resident.
The problem comes here. Mossack Fonseca is a Law firm based from Panama. What it does is pretty straight forward. They create enormous amounts of compaines in no time. And people from all over the world “Take over it” and hence they are not incorporating them.
Now, Indian residents started to buy these companies just like shares. They have quite successfully found a way to evade a good amount of tax. RBI became concerned about this issue and started investigations on this.
Reserve Bank of India then stated in a written document that Indian residents are not allowed to either buy or incorporate companies abroad. But it was too late. many Indians successfully invested their money to evade enormous amount of tax. Upon further investigation, it was found that there were certain amount of companies that even invested before 2004 which was a clear violation of the RBI’s policy. All these people who have done so were exposed yesterday in this list.
It is indeed an alarming situation. Of course we know that we Indians are tolerant and will let go of this topic as quick as possible. In other parts of the world especially in Iceland, it may lead to a huge political crisis. The Pakistan’s prime minister family hold millions of worth real estate in off shore accounts.
A study by a professor at UC Berkely shows that the total evaded amount in Tax haven, Panama would sum up to 7.6 trillion dollars atleast. That’s a lot of money.
Some names to take out – Amitabh Bachchan, Aishwarya rai, Leo Messi (Yes !) , Jackie Chan, Nico Rosberg. Many other government officials come under the list.
And this is just one list. There are many more suck firms like Mossak who are into this business. Imaging the money ivaded if we had a clear amount.
Anyways, let’s get back to our normal lives and act as if nothing has happened.