What Is the Panama Papers Scandal? Tax Evasion of World Leaders, Rich and Powerful People

By Mark Aserit 7 Apr, 2016 13:42 EDT

The Panama scandal has been hogging the news headlines this week, and its documents revealed how the rich and powerful people use tax havens.

According to Forbes, the Panama papers are confidential documents that were leaked from Mossack Fonseca, a law firm based in Panama. According to the company's website, it offers legal and trust services to different countries worldwide such as United Kingdom, Malta, Hong Kong, Belize, The Netherlands, Costa Rica, Cyprus, British Virgin Islands, Bahamas, Samoa, Nevada, and Wyoming. Some of these countries are labeled as tax havens.

A tax haven is a country or territory where certain taxes are levied at very low rate.

As for the number of documents involved in the leak, news websites report it contains 11.5 million confidential documents. The same source from Forbes says it is one of the largest leaks in history, even bigger than the documents revealed by Edward Snowden. Estimates show the documents are approximately 2.6 terabytes in computer storage. To imagine how big it is, 1 terabyte of data is equivalent to 220 DVDs or 1400 CD-ROMs.

CNN reported an anonymous source gave the leaked documents to Suddeutsche Zeitung of Germany and the newspaper shared them to International Consortium of Investigative Journalists (ICIJ). After that, other media firms like BBC, the Guardian and McClatchy reported the documents.

The files reveal the secret transactions of 29 billionaires featured in Forbes Magazine's list of the world's 500 richest people. It also mentioned the brother-in-law of China's President Xi Jinping, Argentina President Mauricio Macri, Ukraine President Petro Poroshenko and the late father of UK Prime Minister David Cameron.

Furthermore, the leak also pointed out more than 500 banks under nearly 15,600 shell companies with Mossack Fonseca.

With that being said, it is important to take note that owning an offshore company or creating an offshore trust isn't an illegal activity. In fact, it is legal in most countries like in the United States. However, what is illegal is using that offshore trusts to hide assets from creditors or evading taxation.

The investigating team wants to find the true owners of the money and the origin of the money. Lastly, they also want to know how the people mentioned in the document evaded huge amount of taxes.

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What Is the Panama Papers Scandal? Tax Evasion of World Leaders, Rich and Powerful People

Survey: Hong Kong teens generally identify with traditional Chinese cultural values

Many American churchgoers expect their pastors’ sermons to help them understand and address modern cultural issues American churchgoers are looking for more than biblical explanation from their pastor each week. Many expect the sermons to help them understand and address modern cultural issues.

Survey: Hong Kong teens generally identify with traditional Chinese cultural values

Global Lutherans celebrate Reformation Day, ‘trusting in the power of grace in a merciless time’.

Many American churchgoers expect their pastors’ sermons to help them understand and address modern cultural issues

2.1M Korean Christians estimated at joint worship service to affirm family, oppose gay marriage, pray for nation

Many American churchgoers expect their pastors’ sermons to help them understand and address modern cultural issues
American churchgoers are looking for more than biblical explanation from their pastor each week. Many expect the sermons to help them understand and address modern cultural issues.