The list of Indians with secret accounts in tax havens sounds like the guest list of a Page 3 party. When so many celebrated and respected people are on the list, it makes you wonder if a tax haven is not so much an illegality as a status symbol.
As of now, The Indian Express thinks they’ve found some wrongdoing. Maybe a percentage did stash money secretly without paying tax. But if a majority did it legally, using the Liberalised Remittance Scheme and show they paid taxes, as this newspaper reported as being possible (‘Initial inquiries suggest 90% Indians have used RBI’s liberalised remittance scheme’, goo.gl/nbVsCL) in due course, for achievers, the ambition might be not to get off the list, but to get on it.
First of all, we should note that Mossack Fonseca sounds like the name of a Bond villain. The name inherently suggests something shady. I am already picturing a man in a white suit, straw hat, with a long cigarette, drinking gin, under a palm tree, transferring astronomical sums from his Swiss banks, on his iPad, while feeding his pet alligator.
Names like these suggest secrecy. It is not a clean name like Citibank or Bank of Baroda that says, ‘Look, we are a bank in a city like Baroda’. If I had a firm that helped set up tax havens, it would have a name like Strauss Murjani Partners or Herzog Bose LLC. A combination of Swiss-German efficiency (I can already picture cold deep iron vaults) with a touch of Indian warmth and duplicity (a smiling face making you sign all sorts of dodgy documents).
However fraudulent and villainous the name sounds, though, and however shocking to us average people, there is really nothing illegal about a tax haven — or Bond villain-sounding firms. Just like a rat will always look for food at the risk of any rat trap, man will always avoid tax in the most nefarious snake-like way possible that is almost — but only almost — illegal.
Accountants world over will find the slightest sliver of things to take advantage of as a ‘tax-deductible’, and celebrate them as little victories. In all human beings, however altruistic we may be, a greedy little voice suggests that taxation means someone took away stuff from you. The wealthier one gets, the louder that voice gets, as does the amount of money in tax. Saving even a penny in tax almost feels like 1-0 to you.
And Mossack Fonseca found not just an item tax-deductible but whole islands tax-deductible — lawfully so — and told the world’s elite. That lot, forever distrusting of their home nations and too well known in their home nations, jumped to score another 1-0 over tax authorities. Again, within the law.
Sure, one understands that the state’s role in water, roads, power, airports, etc. But when it comes to paying for it, the wealthiest to the poorest will take the tiniest opening open to pay less. Also because tax is collected by a faceless, no-fun entity. If tax was a nice sweet-looking old man who showed up on television and said, ‘Don’t cheat me, I’m old and I need your help,’ maybe they’d be less Swiss and Panama accounts.
The shock, of course, was the amount of money offshore. However, in all humans, there is a secret voice that tells us that those sums held by these VIPs need, almost beg, an arrangement like this. It would be highly disappointing if we found out that Vladimir Putin had one savings bank account in Punjab & Sind Bank, or some Indian billionaire was in line behind you at Dhanlaxmi Bank to make a cash withdrawal holding a token.
The other shock is perhaps the amount of money every billionaire, dictator, deposed PM, or warlord puts into property in London. Which almost begs me to speculate that the list was leaked by a disgruntled London journalist who, looking to buy a flat, finally noticed he was priced out by either LLCs or The House Of Saud.
All the dinner party gossip about rich people’s secret money now has some credo. The names are the names you expect. At most, the gossip can be, “What? That’s all he has?” There isn’t one where someone went, “What, him? He has an offshore account? How? I saw him fighting with his driver over change yesterday.”
Apparently, more names are due. The list for celebrated Indians on the Panama offshore list is so large that the list itself may have to be offshored for safekeeping. It may, for sensitivity, secrecy, general VIP-ness and uncertainty in India, need a haven of its own.
Maharaja Gaipajama, you on Panama to be