How Panama Papers are just the tip of the iceberg
How Panama Papers are just the tip of the iceberg
By ET Bureau | 9 Apr, 2016, 04.00AM IST
A tax haven has one of these three characteristics: It has no or a very low-rate income tax. It has bank secrecy laws. And it has a history of non-cooperation with other countries on exchanging tax information. Central America's second largest economy has all three. Poonam Khaira Sidhu on how the Panama Papers are just the tip of the iceberg
The Panama Papers are merely the tip of the iceberg, with 11.5 million files from the database of the world's fourth-largest offshore law firm, Mossack Fonseca, tumbling out last weekend. But to provide some perspective, 400,000 corporations and foundations are domiciled in Panama.
And then again, this is also only one of the many financial centres used by the rich and famous to offshore their wealth. It also highlights the impact of Base Erosion and Profit Shifting (BEPs), conservatively estimated at an annual revenue loss of $100-240 billion.
The stakes are clearly high for governments around the world. The impact on developing countries as a percentage of tax revenues is being estimated to be even higher than in developed countries. So, if there is a poster boy for BEPs, it is the Panama Papers.
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http://economictimes.indiatimes.com/articleshow/51750038.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
