Panama Papers Current Affairs - 2020

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EU Adds 10 Countries to Tax Blacklist

The European Union has expanded its tax haven blacklist by including 10 countries. The list now has 15 countries. The list was first drawn up by EU in 2017 in the wake of several scandals, including the Panama Papers and LuxLeaks, that pushed the EU into doing more to fight tax evasion by multinationals and the rich.

Expansion of the List

  • Seven countries Aruba, Belize, Bermuda, Fiji, Oman, Vanuatu and Dominica were moved from greylist to blacklist due to their inability towards reform commitments.
  • Three other countries added into the list are Barbados, the United Arab Emirates and the Marshall Islands.

EU list of Tax Blacklist or Tax Havens

Tax Havens provide taxpayers with opportunities for tax avoidance, while their secrecy and opacity also serve to hide the origin of the proceeds of illegal and criminal activities. Features of these Tax Havens include low or zero taxation, fictitious residences (with no bearing on reality) and tax secrecy.

EU initiated the naming and shaming tactics through Tax blacklist or Tax havens as a tool for securing a level playing field and as an external strategy for effective taxation by assessing, screening and listing third-country tax jurisdictions which are non-cooperative in tax matters.

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Government reconstitutes Multi-Agency Group probe into Paradise Papers revelation

The Union Government has reconstituted Multi-Agency Group (MAG) to investigate cases relating to ‘Paradise Papers’ data disclosure which is also probing the Panama Papers leak.

It will be led by Central Board of Direct Taxes (CBDT) Chairman and will have representatives from Enforcement Directorate, RBI and Financial Intelligence Unit.

The MAG was constituted in April 2016 to investigate legality of money stashed in offshore entities by Indians named in Panama Papers by International Consortium of Investigative Journalists (ICIJ). Panama Papers had named several prominent Indian politicians, actors, and businessmen as having offshore undisclosed bank accounts.

Paradise Papers

The Paradise Papers, a largest ever leak of financial data containing 13.4 million documents on offshore entities involving people and companies from 180 countries to dodge tax. The files were first obtained by German newspaper Suddeutsche Zeitung and shared with ICIJ and partner 95 media outlets that includes Indian partner The Indian Express.

The leaked data includes seven million loan agreements, financial statements, emails, trust deeds and other paperwork over nearly 50 years from Appleby, a prominent offshore law firm with offices in Bermuda and also from Asiacity, a Singapore-based family-owned trust company. India with 714 names, ranks 19th in terms of number of names that feature in papers.

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