This initial list was followed by another set of names/addresses leaked in May. While some names and addresses of entities/officers in the Panama Papers database of the International Consortium of Investigative Journalists, are clearly those of Goans. There were many a name which may not be Goan but who are under a scanner for their links with Goa’s mal-development model. There were also addresses in Candolim and Bogmalo prominently figuring in the database of the International Consortium.
Even as the Consortium has indicated by their disclaimer that they are not necessarily questioning the legality of the entities in the database or the transactions of those involved, the million dollar question is why do people stash their money in certain countries abroad, if they are anyways going legal about their earnings? What does registering entities offshore in countries like Panama offer apart from secrecy in cash flows, that the persons stashing the money can cash in on? These are the questions that we need to ask. So even if these entities and officers are legal, isn’t the issue finally about a skewed tax system?
Yet the Panama leaks do not generate the kind of outrage, which, for example, a case of trafficking or any sensationalized case, might generate. This is, perhaps, because the implications of the Panama papers are insidious and not obvious. “So what if some person from out here decides not to declare his income, and thereby evades tax payment? What do I lose?”, the common person seems to say or think. Hence it is necessary to break this apathy. The Panama laws did not require accounts holders to pay any taxes in Panama, though they did not suggest that taxes can be evaded in the home country which is the source of the income. We need to unpack the implications of such Panama laws which can enable tax evasion.
Countries, including India, and states within countries, including Goa, cry poverty when it comes to initiating fiscal measures for addressing crimes against women or against marginalised sections of society. They may even come up with inconclusive reports following their inquiries into crimes, and cite lack of possibilities of adequate investigative infrastructure and personnel for the same. Required social support systems, such as a victim assistance unit for children, are set up without budgetary provisions. Just a single inadequately budgeted one-stop crisis centre for women is visualized for an entire state as a pilot project, with no provision or envisioning at either the Central or the State level to convert the pilot project into a regular feature for all talukas. Even measures pressed for by women’s groups over the last two decades, such as a women’s desk at each panchayat, have not seen the light of day thanks ostensibly to lack of provisions. Para-legal volunteers are paid a measly honorarium of Rs 250 per day for their selfless and invaluable services. All this happens in the name of an inadequate tax revenue base from which to provide for.
On the other hand, Goa has the casinos which have visibly negative implications for the vulnerable family members, and which by their very nature enable non-disclosures of monies, and consequent tax evasion. Each Government of the day makes out that casinos are necessary to broaden the revenue base and generate welfare schemes for widows, for instance. But what they do not say is this: That the revenue base is in the first instance narrowed by tax evasion made possible by projects such as casinos, by enabling non-disclosure of monies and money-laundering. And then casinos are justified in the name of widening that very tax base, which they have helped narrow, to generate revenue for welfare schemes for women.
Because of this loss of revenue and a skewed choice of State responsibilities and beneficiaries, a disproportionate burden of tax is borne by the common person. Take, for instance, a vendor in the Panjim market. She pays sopo (daily rent) of Rs 10 per day which translates to about Rs 3650 per year. She pays sales tax and value added tax on every little thing that she purchases, even if it be toothpaste or biscuits, while the affluent businessman who has stashed his monies in offshore tax-havens may actually pay little or nothing, because even the products he purchases are not accounted for.
India is one of the signatories to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, and its commitment is in effect from 1st June 2012. Will it actually enforce its commitments? Or will the enforcement remain merely at the level of a token income tax notice?
Appropriate decisions and action on these matters can go a long way to ensure that the tax base is broadened so that high income citizens shoulder their legitimate portion of the burden and ordinary citizens are not crushed by the same. For this to happen, the linkages between the tax evasion and the violation of human rights must be commonly understood, the outrage that follows must be visible and parties using the lingo of anti-corruption, like AAP, must bring this kind of corruption to the fore.
(Albertina Almeida is a lawyer, human rights activist and an independent researcher.)
