Hundreds of world leaders and politicians use financial constructions through tax havens, possibly evading tax. This is evident from leaked documents in the hands of the International Consortium of Investigative Journalists (ICIJ). These include the king of Jordan, the presidential family of Azerbaijan, the prime minister of the Czech Republic, the presidents of Ukraine, Kenya and Ecuador and circles around the Pakistani prime minister. Also outgoing Minister of Finance Hoekstra is called.
Dozens of international media outlets are involved in the consortium, including The Guardian, Le Monde and The Washington Post. The now leaked documents, from fourteen letterbox companies, have been dubbed the Pandora Papers. The Panama Papers were published via the consortium in 2016 and the Paradise Papers in 2017. According to the ICIJ, this is the largest collection of leaked documents to date.
The media involved in the consortium emphasize that it is often not illegal to pass money through letterbox companies or so-called offshore structures. “But these things often boil down to moving profits from high-tax countries, where they’re earned, to companies that only exist on paper in low-tax countries.” says the ICIJ. “The use of offshore structures by politicians is particularly controversial, as they can be used to hide politically unpopular or even illegal activities from the public.”
Real Estate Deals
The documents show that Jordanian King Abdullah II owns $100 million in real estate in London, Washington and Malibu. Czech Prime Minister Andrej Babis has bought a chateau in France for 22 million dollars through an offshore company. Ukraine’s president, Volodymyr Zelensky, sold a 25 percent stake in an offshore company to a friend who now works as his top adviser during his election campaign.
The family of Azerbaijani President Ilham Aliyev owns around £400 million worth of real estate in the United Kingdom. One of the properties was sold to the British royal family for £67 million.
People affiliated with Pakistani Prime Minister Imran Khan are also mentioned in the documents. Khan campaigned against his predecessor Nawaz Sharif several years ago because Sharif’s children had interests in offshore companies. Khan welcomed the Panama Papers that named Sharif and ultimately forced him to resign. The Pandora Papers show that Pakistan’s current water minister tried to stash money with an offshore company. Khan’s finance minister owns four offshore companies.
Kenyan President Uhuru Kenyatta also spoke out against these constructions in 2018: “The assets of every official should be made public so that the people can question them and ask themselves: what is legitimate? If you can’t justify yourself, do you have questions to answer. Me too.” Now Kenyatta and family members appear to have assets in several letterbox companies.
Minimumbelastingtarief
The constructions often run through countries and islands in South and Central America. However, the Netherlands is internationally also known as tax haven. According to the NGO Tax Justice Network, only the British Virgin Islands, the Cayman Islands and Bermuda play a greater role as tax havens.
Internationally, various initiatives are being taken by governments to tackle tax avoidance. The Organization for Economic Co-operation and Development (OECD) agreed this year that worldwide a minimum tax rate should come. This is mainly intended to tax multinationals.
Companies must then pay at least 15 percent tax everywhere. It should bring in an additional $125 billion in tax revenue. Development organization Oxfam still called that percentage too low.
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List of Lebanese politicians in the list if you please.