The Pandora Papers: How several elite Indians are stashing their wealth in offshore accounts

Several Indian billionaires have been named in The Pandora Papers – which are a set of files revealing how extremely rich people have been evading tax by putting their money in offshore trusts. Most of these accounts are set up in tax havens like Panama, Cayman Islands, Switzerland, Monaco and Dubai.

Leaked to the International Consortium of Investigative Journalists (ICIJ), the data consisted of 11.9 million files related to 14 global firms. While the consortium didn’t reveal their source, they have shared access to the files with journalists in 117 countries (including those from The Washington Post, Le Monde, The Guardian and PBS Frontline).


Closer home, names like Anil Ambani and Sachin Tendulkar have appeared in the papers. That said, Mrinmoy Mukherjee (CEO and director of The Sachin Tendulkar foundation) told The Indian Express that all his investments are legally acceptable.


“We reiterate that the investment by Mr. Tendulkar has been legitimately made through banking channels from India and has been declared to the income tax authorities. Further, the amount of Rs 60 crore as quoted by you is grossly incorrect, but regardless, all amounts received by Mr. Tendulkar on liquidation of the investment have also been declared in his tax returns,” he said.


Indeed, not everything revealed in the Pandora Papers is illegal but it gives us an indication of the massive wealth stacked in foreign countries with relaxed tax laws. A lot of the investigation is still ongoing (considering the massive number of files) and we may see a few more famous names crop up. In their latest report, The Indian Express said that it had verified just 60 names from a possible 380.


People with billions of dollars in debt have been found to divert their assets in these foreign countries. For sure, the jurisdiction in such countries help criminals get away with these activities as they know how to keep a secret.


So far, it has been difficult for the government to recover funds worth thousands of crores from these places. In their report on the Pandora Papers, The Guardian’s investigation team wrote, “Although morally questionable, this kind of tax avoidance can be legal. Offshore jurisdictions also tend to be highly secretive and publish little or no information about the companies or trusts incorporated there.”


According to some experts, these events are a consequence of Arun Jaitley hiking the surcharge on people earning more than Rs. 1 crore per year in 2015-16. In 2021, the surcharge on people who are earning more than Rs. 5 crore per year is 37%.


Across the world, major personalities like the King of Jordan, the Prime Minister of Czech Republic, the President of Ukraine and many more have been named in the Pandora Papers.

It’s important for the government to separate the individuals who are misusing this facility from the people who genuinely need to protect their estate. Otherwise, it’ll be unfair on honest taxpayers who are abiding by all the rules and regulations.


References:


1. Explained: Why do the Pandora Papers matter? (The Indian Express)

2. Pandora papers: biggest ever leak of offshore data exposes financial secrets of rich and powerful (The Guardian)

3. Sachin Tendulkar, wife, her father, had BVI company, wound up after Panama expose (The Indian Express)

4. Pandora Papers: Secret wealth and dealings of world leaders exposed (BBC)

5. Pandora Papers: Key findings expose financial secrets of global, Indian elites (India Today)