Although it's been a well documented fact that Panama plays a part in a global network of tax havens that's been in use for decades to hide wealth from tax authorities, the naming and shaming of prominent individuals who go through a lengthy exercise in protecting their wealth from tax erosion adds more realism to the matter than perhaps the average 9-5 working, tax-paying compliant citizen would've understood in relative measure up until now.
Timing of the release couldn't have been chosen at a better moment as the global economy and more so developed nations flirt with the prospects of grave economic consequences after efforts to fuel growth into the world economy with debt has taken a nasty turn with the resultant outcome being the absence of much needed growth.
The implications of such revelations take a heightened stand when you weigh up the considerations mentioned above coupled with a consistent demand for a greater proportion of the middle class incomes to be taken to fund the incompetency of wasteful governments whilst the stench of hypocrisy hangs over disingenuous politicians campaigning for restrictive fiscal policies while seeking out tax avoidance avenues for protection of their own wealth.
— Dejban Law (@dejbanlaw) April 6, 2016Government leaders are going to find themselves in an awkward position in their attempts to apply a degree of austerity if found named in the leaked documents as it would immediately be casted as contradictory and most likely cause mass protests which would dramatically reduce their level of political persuasion in trying to navigate their countries through the necessary procedure to get on the right path again.
We've seen the first victim of the so-called Panama Papers being the Icelandic Prime Minister Sigmundur David Gunnlaugsson after his name appeared in the leaked documents with pressure from the Icelandic public calling for his resignation as it emerged that he and his wife had used Mossack Fonseca to purchase an offshore shell company where money inherited by his wife was place into. Parliamentary rules stipulate that all members needed to disclose their interests in companies for which Gunnlaugsson didn't.
Icelandic citizens would've been reminded of the dire economic circumstances they had to endure through during the height of the Financial Crisis 2008 and such an action taken by Gunnlaugsson could be seen as not being patriotic by avoiding paying his fair share of the tax burden during those dark days.
Although Gunnlaugsson may be considered small fry bigger political players have been named in the scandal with British Prime Minister David Cameron being the focal point after it was revealed his late father had also acquired the services of the law firm to help prevent his investment fund from paying taxes.
Having announced the date of the referendum to vote whether to stay in the European Union, Cameron has faced an uphill battle so far convincing the UK public of coming into the "Yes" camp following a number of big name politicians from his own Conservative Party campaigning against him for the "No" vote dealing a crippling blow to his chances of success and possibly out of favour with his fellow Tories.
However these latest developments add further woes to Cameron's image within the party having implemented tightened budgetary measures during his tenure which would fly in the face of the Conservative policies. The short duration between damaging political outcomes puts Cameron under pressure in the coming months in avoid losing his position at No. 10 Downing Street.
It's evident that the extent to which these revelations could have a ripple effect on politics may well alter the course of the political environment especially in Europe where debate is beginning to rage on over solutions to the inherent problem of delaying austerity until the economy of the region is strong enough to withstand it. As time runs out and the clock keeps ticking, leaders will inevitably be forced to implement strong measures but with Panama Papers now lying in the minds of citizens, how much longer can these frought governments continue to veil the problematic situation their countries find themselves in?
Iceland's PM has resigned over #PanamaPapers leaks; whose heads may roll next? https://t.co/Y8HbhBLeV1 pic.twitter.com/4I5ymYRNmR— CNN International (@cnni) April 6, 2016
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