Pandora Papers: how to crack down on tax avoidance?

The Pandora Papers are showing once again how politicians, oligarchs and celebrities around the world use tax havens for secret transactions. The large-scale investigation has revealed that leading politicians such as Czech Prime Minister Babiš, Ukrainian President Zelensky and British ex-prime minister Tony Blair used such structures. Although their actions may be reprehensible, pointing the finger won't solve the problem, commentators admonish.

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Polityka (PL) /

Unfortunately totally legal - also in the EU

Polityka calls for changes to the system rather than a discussion about individuals:

“The processes described in the investigation are not criminal, they are completely legal. They go unpunished, except perhaps for public stigmatisation. However the fact is that the rich mostly couldn't care less about such stigmatisation because they can afford to ignore it. The problem isn't them but the global economic and tax system that makes such dealings possible. So instead of focusing on autocrats' billions, it would be worth asking what the European Union has to say about the barely existent tax system in Cyprus, and why it tolerates it.”

El País (ES) /

The state fills the gaps at the expense of the poor

El País points to the consequences of such behaviour for the rest of the population:

“According to the Tax Justice Network, tax evasion amounts to around 370 billion euros per year, thus depriving the welfare state of important funds from tax revenues. ... What the tax evaders don't pay is usually compensated for by an increase in value-added tax. This is also anti-progressive because the consumption tax places a heavier burden on those with lower incomes, as they are forced to spend almost all their income on consumption because they have virtually nothing left to save.”

Público (PT) /

We need a revolt

The only way things will change is if pressure is exerted on tax havens worldwide, says Público:

“Money is power. If those who have the power to put an end to the tax havens in the global financial system benefit from these themselves, it is indeed difficult to see light at the end of the tunnel. ... Yet simple measures would suffice. For example, banking licenses could be revoked from authorities that operate in these jurisdictions but don't publish the list of end beneficiaries and the assets they oversee. We must be aware that without a global revolt against these conditions, politicians will not be inclined to take action.”

De Volkskrant (NL) /

Tax avoidance as a clever trick

Dutch Finance Minister Wopke Hoekstra also had money invested in a tax haven, according to the research. This isn't illegal but it is reprehensible, De Volkskrant observes:

“More important is also the bigger power-political picture. After all, who decides what is and is not illegal in the Netherlands? Why do the authorities crack down on the parents [in the child allowance affair] on the basis of (unjustified) suspicions while for years tax constructions have been regarded as simply a clever trick? This is a consequence of how laws are made and interpreted. Politics made by people like Hoekstra. The minister's first reaction was to stress that he had done nothing criminal. That is precisely the problem.”

Süddeutsche Zeitung (DE) /

Protect whistleblowers and journalists

It is not primarily the tax authorities who bring tax offences to light, the Süddeutsche Zeitung points out:

“Research on the part of the independent press has become more decisive in tax matters than in almost any other field. The fact that they have repeatedly got their hands on extensive sets of data full of internal documents has so far proven to be the only effective way to expose the practices of the super-rich and powerful in tax havens. Journalism based on leaks has become a substitute for political action and criminal prosecution. ... So for the new government, the protection of whistleblowers and journalists should play at least as big a role as the struggle for new tax agreements.”

Sme (SK) /

Only to be expected with Babiš

Czech Prime Minister Andrej Babiš is among the prominent public figures who have come under fire as a result of the revelations - and just a week before the Czech elections, Sme notes:

“The fact that Babiš 'diverted' hundreds of millions away from the Czech tax authorities and to the Virgin Islands will shock neither his supporters nor his opponents. Both have a clear picture of what he's like. ... The fact that the fraudulent transaction has come to light a week before the Czech elections is a coincidence, but one that should be welcomed. After all, voters have a right to know what kind of politicians are asking for their trust.”

Le Soir (BE) /

Authorities should follow the media's example

The media must keep up the pressure with such revelations until governments finally cooperate, says Le Soir:

“The example set by media outlets that are joining forces and getting involved to expose these unacceptable practices should undoubtedly be followed by the states: join forces and get involved. Is this just wishful thinking in a world where there is competition to have the lowest taxes - even between European states? Without doubt. But without political will and international cooperation there will be many more leaks to expose.”

De Tijd (BE) /

Take same approach as with global minimum tax

De Tijd also hopes the revelations will stimulate the political will to finally introduce effective international regulations against tax avoidance:

“This year, more than a hundred countries have already reached a basic agreement on the introduction of a minimum tax for multinational corporations. But a similar initiative to tackle shell companies and tax evasion by wealthy citizens is not as high on the political agenda. Yet only broad-based international action can deliver results. This would help not only the fight against tax avoidance, but also against organised crime, drug trafficking and major corruption.”