Image copyright Getty Images Image caption Prime Minister Justin Trudeau has vowed to tackle offshore tax avoidance
International Business Times has announced the launch of an initiative called the Pandora Papers, investigating the use of offshore tax havens.
In the last year, the Panama Papers and the Paradise Papers have shed light on the shifting of money around the world and information that has the potential to facilitate tax evasion and money laundering.
This could leave people working or benefiting from companies in tax havens better off than the average worker.
We asked Australian journalist Laurie Penny to look at the Pandora Papers, which have just been released and give us an overview of the files.
What exactly are the Pandora Papers?
I think what’s ‘particle’, ‘partium’, ‘particle’ and ‘particulates’ is a bit difficult to say.
There’s the usual stuff you’d expect, like HSBC US, which was revealed to be a sort of money laundering ringhole, and a few cases of outright criminality.
But also it looks like a lot of the offshore firms are involved in financial intelligence-gathering and financial help with the government – you can see that ‘yes’, offshore firms actively trying to influence policy.
It’s a long, ongoing investigation which doesn’t stop growing as more documents are leaked from the Panama and the Bahamas.
In September last year, WikiLeaks released just the first 4,000 pages of the Panama Papers, and the Norwegian writer Torbjoern Wibergh tweeted that the data that came out “takes the previous 5 years to read through in just 2 weeks.”
The whole story is in its infancy and will be even bigger when the next bunch of files are released.
Is the Pandora Papers – which describes 40,000 emails and minutes of meetings – the worst we’ve seen?
As with all major investigative journalism investigations, this is a process not a one-off event.
However, the details of how some of these firms act as key parts of the tax planning arm of the global banking system are shocking.
There’s no argument that the existence of certain offshore firms has hurt many people’s wallets, but it’s often through very shadowy schemes.
Can’t Canada come up with some legal solutions and start collecting revenues?
The rest of the G20 (the group of the world’s richest countries) is currently investigating offshore tax regimes, with Luxembourg, Cyprus and Switzerland under investigation – which isn’t surprising when you think how well these countries themselves have acted in the past.
However, these investigations have also revealed that very wealthy individuals and corporations were able to get around this illegal scrutiny, and it’s time for more of those actors to pay their fair share of tax.
However, it does look like the Canadian government is letting them get away with a lot more than they were previously.
My reading of this, and it’s a big thing, is that the Canadian tax authorities are on an admiral and leaving this happening, whereas the US authorities are on a ship trying to catch them.
Has the Federal Government addressed the issue?
Yes, because of the hope of keeping any fallout from this overseas.
According to The Globe and Mail, a government source told the paper the files the papers contain “are both issues that will have impact on the budget and an issue that [the government] will want to understand before making any decision.”
The problem is, this will not be a sustainable solution. Companies will find ways around that.
But as the book The Fight For the Wealthy: Wealth for the 99% asserts, the legal regime is set up to allow for legal tax havens.
Once that system is gone, the economic growth will no longer exist and the inequality gap will actually become wider.
We need a fundamental change in the way we organise our economy and society.
The Pandora Papers is an attempt to start the kind of discourse about it.
Ultimately, it’s about tax havens being bad and the massive but subtle assistance they’ve helped get around the law.