Dilip Simeon's blog

The Panama Papers provide further evidence of the scale of global tax dodging, and of its impact on poverty and inequality The world is talking about tax this week, so here’s another tax story for you. Asana Abugre has a small shop in Accra, Ghana where she makes and sells batiks and tie-dyed textiles. Asana pays her taxes regularly. Women  like her, working in markets across the city, sometimes pay up to 37% of their income in tax. Tax collectors come to their shops to collect taxes, and there is no chance of them not paying, regardless of how little money they might have made that day. Of course, this isn’t the tax story that everyone’s been talking about. The release of the Panama Papers by the International Consortium of Investigative Journalists is the biggest data leak in history, and this time it’s some of the world’s most powerful people who have cause to worry, with the spotlight finally falling on their own secretive tax arrangements. But the two stories are ...

The world of secret offshore companies is outrageous. The rich and corrupt, seeking to hide assets and income from taxes, set up shell companies, foundations and trusts – by the hundreds of thousands – every year. Despite the harm it does to local government and the likely illegality of it, the industry holds public trade shows and conferences where shady lawyers, accountants, financial planners and consultants flaunt their services. The numbers are mind-numbing: over $100 trillion hidden from view, costing middle class taxpayers trillions to make up the difference. The treasure trove of the Panama Papers has imposed a little sunshine here, in Secrecy World. Reviewed by David Wineberg Jake Bernstein has followed the leads backwards and forwards. He fills in the details of who the players are and how they got there. He also takes some minor side trips to corrupt practices like drug dealing, a slave ship, abandoned construction and a fraudulent reinsurer, to show how these players ar...

When he wasn’t aboard his yacht, Farid Bedjaoui held court in the Bulgari Hotel in Milan, a renovated 18th-century palace nestled between the botanical gardens and the La Scala theater. Over five years, Bedjaoui’s hotel tab there exceeded $100,000. In the plush rooms and the granite-lined lobby, Bedjaoui met with Algerian government officials and executives from Saipem, the Italian energy giant. Their agenda, according to witnesses later interviewed by Italian prosecutors: arranging some $275 million in bribes to help the energy company win more than $10 billion in contracts to build oil and gas pipelines from the North African desert to the shores of the Mediterranean. To shift the bribe money between countries, Bedjaoui used a cluster of offshore companies that helped him shield the transactions from scrutiny, Italian prosecutors claim. Twelve of the 17 shell companies linked to Bedjaoui were created by Mossack Fonseca, the Panama-based law firm that is at the center of the Pa...

How do the banks continue to get away with it? The  latest revelations  about Credit Suisse provide yet another glimpse into the corrosive nexus of banks, corporations, accountants, lawyers and financial intermediaries that enables the wealthy and political elites to profit from illicit practices. The bank itself is no stranger to predatory practices. Since 2001 it has been  fined at least 47 times  by the US authorities and paid fines totalling $10.7bn. Since 2010, it has also been fined on at least six occasions by the UK’s Financial Conduct Authority (FCA) and paid fines  totalling  more than £300m. The fines have become just another cost of doing business, and are passed on to customers. Credit Suisse is not alone. The roll of dishonour shown by the Panama Papers, Paradise Papers, Pandora Papers, HSBC leaks, Luxembourg leaks and others shows that virtually every major bank is involved in predatory practices. All these leaks have provoked a public deba...

The Panama Papers are an unprecedented leak of 11.5m files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca. The records were obtained from an anonymous source by  the German newspaper Süddeutsche Zeitung , which shared them with  the International Consortium of Investigative Journalists  (ICIJ). The ICIJ then shared them with a large network of international partners, including the Guardian and the BBC. What do they reveal? The documents show the myriad ways in which the rich can exploit secretive offshore tax regimes. Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens. A $2bn trail leads all the way to Vladimir Putin.  The Russian president’s best friend – a cellist called Sergei Roldugin – is at the centre of a scheme in which money from Russian state banks is hidden offshore. Some of it ends up in a ski resort where i...

A Turkish journalist has been sentenced to more than a year in jail for her work on the  Paradise Papers investigation  into offshore tax havens, because it revealed details of the business activities of the country’s former prime minister and his sons. Pelin Ünker, a member of the International Consortium of Investigative Journalists (ICIJ) was found guilty in an Istanbul court of “defamation and insult” for writing about companies in Malta owned by Binali Yıldırım and his sons. Yıldırım was prime minister from 2016 to 2018, when the post was abolished, and is now the speaker of the country’s national assembly. After the sentence was issued, Ünker  told the ICIJ  she intended to appeal, pointing out that the Yildirim family had admitted that articles about their Maltese businesses were accurate. She said: “This decision is not a surprise for us. Because the result was certain from the beginning. There is no criminal offence or defamation in my articles. ...

First came the  Panama Papers , then the  BahamasLeaks , and now it’s the  Paradise Papers . Journalists continue to shed light on and raise a public outcry over the offshore financial centres that corporations use to reduce their tax bill – something that  is still being challenged in court . A  recent study  has now uncovered all the world’s corporate tax havens and, for the first time, revealed the intermediary countries that companies use to funnel their money into these places. Published on July 24 in the academic journal  Scientific Reports , the paper Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network shows that offshore finance is not the exclusive business of exotic, far-flung places such as the Cayman Islands and Bermuda. Beyond “Conflict Minerals”: The Congo’s Resource Curse Lives On The Netherlands and the United Kingdom also play a crucial – although a heretofore obscure – role in ...

Some public reactions https://m.facebook.com/story.p hp?story_fbid=1015469360828860 9&id=505073608 From Surat to Shamli, Indians are uploading videos of bank queues on social media With ATMs functioning only at 10% of capacity, the struggle for cash is real. 10 Reasons Why BJP's Demonetization Move Is An Unmitigated  & Politically Motivated Disaster Note ban has led to 'financial chaos', say bank unions A comment by Jairus Banaji:  The fanfare about the banning of notes is pure eyewash and typically the hardship is being felt by millions of people whose income doesn’t even reach taxable levels. Cash is a minute fraction of the entrenched mountain of undeclared income/assets in India. If Modi was really serious about tackling the problem (he absolutely isn’t), he could have started by ordering an investigation into why Gautam Adani’s brother turns up in the Panama Papers and what the links are between the Adani Group and those money laundering circuit...

NB: What is capitalism without cronies and corruption? Will the free-market cult followers consider why capital is free, but human beings are not? DS Suspect foreign money flows into booming American tax havens By Will Fitzgibbon, Salwan Georges and Debbie Cenziper Across from a Holiday Inn, in a red-brick building with a welcome sign that reads “The Heart of America,” a little-known financial firm set up shop seven years ago and extended an invitation to the world’s elite. Trident Trust promised to protect the fortunes and privacy of its new customers by relying on the laws of a state that had become a global destination for wealth. The company called it: “The South Dakota Advantage.” Among those who answered the call: A Colombian textile magnate caught in a scheme to launder the proceeds of an international drug ring, an orange juice mogul who settled with authorities in Brazil for allegedly colluding to underpay local farmers and family members of the former president of a sugar pro...