Some of the ins and outs of Pandora-Papers have been rediscovered by 600 journalists in 117 countries

Is the use of a tax haven illegal? How easy is it to withhold money abroad?

The word Pandora originates from a 'Greek' legend. In it a man named Pandora finds a box. Before that, good things come out, but then terrible things come out. News with such 'dangerous' and 'frightening' things is also called Pandora-Papers from the Pandora's box.

It has been known for years that even big-headed politicians, billionaires, high-earning film-stars or sportspersons set up their so-called 'tax havens' in secret countries to keep their money secret. For that, they set up fictitious companies and invested their money in them, showing that money as the 'profit' of the companies. In this way, on the one hand, they can hide their illicit money, on the other hand, they can whiten their 'black money', but they can also avoid the huge income tax of the governments of the countries from which they have diverted the money. About 200 journalists have traced it again in 114 countries after months of hard work.

For this, there are three points to keep in mind.

(1) It is easy to set up a (fake) company in those countries.

(2) The laws in those countries are such that it is difficult to find the owner of the company.

(2) Corporate taxes in those countries are very low or non-existent.

Such countries are called 'tax havens'. However, the number of such tax havens is not known. But the Duke of Switzerland, Singapore and British Overseas Territories such as the Hayman Islands, the British Virgin Islands and the small Liechtenstein on the eastern tip of Switzerland. It is also said that in those countries, 'negative-interest' is taken on deposits. That is about 1.5 per cent, which means that if one billion dollars were put there, after a year and a half, that amount would be 25 million. This 'negative-interest' drives the economies of those countries. Those who withhold such money do not mind. On the other hand, most of them, by setting up fake companies, showing their profits, turn 'black money' into 'white'. On top of that they also pay the nominal income tax applicable in that country.

Is it illegal to use a tax haven?

Holders of this 'number two' money send their money abroad. In fact, it is not illegal to send money to set up a company abroad, but black money (except for paying income tax or corporate tax in the country where you earn money is called black money if it is sent abroad. ED and IT departments Asking the source, they send money to such tax havens through hawala scams as they cannot show it.

One of the reasons behind doing so is to protect one's own safety and security in that country. So another reason is the widespread political instability in the country.

It is not possible to estimate the amount of such black money in the world, but rough estimates suggest that it could be as high as ૩૨ 2.5 trillion to ર્વ 3 trillion. The loopholes in the law are also responsible for that. Otherwise, why so much money can be raised. Real estate deals play a big part in generating such black money.