$100b stashed by Pakistanis in offshore companies

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Retired Justice Shaiq Usmani said that people became over-emotional when the Panama leaks hit the headlines in Pakistan; people forgot that offshore companies had existed even before the 1970s to avoid taxation.

Speaking at a session on the legal and business aspects of the Panama Papers organised by the Pakistan Institute of International Affairs here the other day, Justice Usmani explained that anyone could own an offshore company; the problem started when people who ran your company used public money and parked it there.

Usmani said that Panama was just one place people had offshore companies, other places include the British Virgin Islands, Cayman Islands and the Bahamas were tax-free havens as they had lax tax and secrecy laws which restricted the governments from sharing names. He said that 75 percent of the world’s shipping industry ships were owned by offshore companies.

He discussed how offshore companies were an off-shoot of limited liability companies.

He explained how people avoided tax and how it became easier to keep money earned through illegal means such as corruption and criminal activities in offshore accounts.

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To discuss the investigative, business and social aspects of the leaks, PIIA had invited former LG minister Sindh Agha Masood Hussain, Prof Dr Tanweer Khalid and AF Ferguson & Company’s Mohammad Raza and Shabbar Zaidi.

Hussain said that there were more than 200 people who had offshore companies in Panama.

Dr Tanweer Khalid, a political scientist and faculty dean at Ziauddin University, said: “The Panama Papers are an important milestone in data journalism”. She said it took the journalists one year to investigate and verify the 11.5 million financial papers.

She said it was important to discuss the legal aspect of the Panama Papers to understand how the leaks would affect business and society.

Mohammad Raza claimed that the Panama leaks were just the tip of the iceberg in terms of offshore accounts, adding that there were several countries and several firms that should be looked into.

Talking about the Panama Papers, he said the information was incomplete as the whistleblower and journalists had only uncovered names — not their financial statements. He said that wide estimates suggested that there could be $70 billion to $100bn kept away in offshore companies.

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