Panama Papers net $1.2bn for tax authorities

3rd April 2019

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Kirsten Hastings

The organisation that published 11.5 million documents leaked from Panamanian law firm Mossack Fonseca has confirmed that the globally tally of fines and back taxes resulting for the exposé has passed $1.2bn (£918m, €1.07bn).

The International Consortium of Investigative Journalists (ICIJ) reported updated figures from various tax authorities on Wednesday – three years after the data was made public.

Not slowing down

The UK appears to be the biggest winner, having secured over £252m since the scandal broke in April 2016.

Of that sum, £119m has been brought in by HM Revenue & Customs since June 2018 – suggesting that there has been no slowdown by the UK taxman to get any monies owed.

The French authorities confirmed nearly $136m has been recovered, with that figure expected to rise. More than 500 inspections have been carried out since April 2016.

Australia has been similarly successful, adding another $43m to take its tally beyond $92m; while Belgium added an extra $6.5m to reach $18m.

But, according to the ICIJ: “The $1bn plus Panama Papers’ tally almost certainly understates the total revenue raised [as] many countries do not disclose information on tax settlement.”

Changing attitudes

The data leak shone an unflattering light on the offshore practices of the wealthy.

This, in combination with the common reporting standard and other transparency measures, has undoubtedly impacted the ways in which individuals and corporations structure their wealth.

But the international financial services industry hit back at how it was portrayed, especially in light of the limited scope of the illegal activity that was uncovered in the Paradise Papers.

That leak came less than two years after the Panama Papers and revolved around 13.4 million documents that were stolen in a cyber-attack on law firm Appleby.

Unlike Mossack Fonseca, which has since collapsed, Appleby took UK newspaper The Guardian and the BBC to court.

The case was later settled.

While wrongdoing was uncovered, a lot of the activity reported in the documents of both the Panama and Paradise Papers was not illegal.

The changing attitudes toward international financial planning is evidenced by a disclaimer that has appeared on the ICIJ website, which reads:

“There are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any people, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly.”