Be transparent

NOW we have another list, the “Paradise Papers” that has named hundreds of suspects, including ministers, actors, media barons and corporate honchos, taking shelter in tax havens for alleged evasion. Some of these Indian elites had earlier figured on the list of “Panama Papers”, a similar expose that took place in April last year. The latest “revelation” forced the government to issue a status report about the ongoing Panama Papers’ investigation that includes the names of over 400 Indians or persons of Indian origin.

As expected, Finance Minister Arun Jaitley quickly announced a multi-agency panel to probe the leaked financial documents that allege links of certain Indians with overseas entities in the “no tax” or “low tax” havens. But, the past experience with the probe panel stratagem is not very encouraging. After spending over 18 months scrutinising 426 cases highlighted in the Panama Papers, the probe panel could so far separate 147 “actionable cases” involving a mere Rs 792 crore, which is, on an average, about Rs 5 crore per case. It is intriguing: why would a person take so much pain and risks for such a small amount? It is natural for the rich and mighty, involved in these cases, to pull strings and get their names cleared. The government must ensure that the probe panel has examined each case diligently, without any fear or favour. There is also a need to expedite the process of framing specific charges against the culprits and taking action against the guilty. The name-and-shame strategy would also help in dissuading other potential offenders.  

The multi-agency probe panel, investigating the Panama Papers, has exonerated 279 entities because they did not violate any law. Similarly, one should be careful before concluding that all individuals listed in the latest expose are tax evaders until proven guilty. The law allows individuals and corporates to invest overseas within a prescribed limit. A sustained investigation by the probe agency is a must before concluding culpability of individuals named in the expose. Meanwhile, businessmen, politicians, cine-stars and other elites of society must learn to remain transparent in their dealings because nothing remains a secret forever.