PANAMA PAPERS

PANAMA PAPERS: A CELEBRAL GLOBAL MADNESS AND WHAT OPTIONS TO MITIGATE THIS SCOURGE IN THE REALM FOR PRUDENT FINANCIAL ACCOUNTABILITY THROUGH TAXATION

WRITTEN BY

ASSAN JALLOW, PhD

[email protected] / [email protected]/[email protected]

Abstract

This paper is a qualitative research dictated by the current unfortunate global financial sham. The paper has many dimensions but is limited within the parameters of taxation. Although, some generic discussions from the discourse of financial management are also discussed to theoretically enrich the paper as it deals with fictitious financial transactions through the establishment of offshore companies within the shores of established tax haven jurisdictions. Tax governance, accountability and transparency are the precepts for ethical financial obligations. They are the central components required in jealously guarding and preserving the wealth of a nation in the course for maintaining healthy and balanced financial transactions that is not devoid of any unethical considerations. This paper is a ?post-mortem? empirical discussion on the “Panama Papers”. In this paper, the author discusses on the exposition of fraudulent financial transactions by offshore companies in tax haven jurisdictions. The paper also examines the effects of ineffective tax handles in the collections and enforcement of taxes from wealthy individuals and businesses. Findings from this paper suggest that there need to have a more robust tax administration in the drive for responsive compliance risk management strategies that are practicably proactive and responsive in nature. The findings provide a platform for global tax administrations from the developed, developing and transitional economies to work closely and share information in order to better mitigate the scourge of aggressive tax avoidance schemes and tax evasion practices. The paper recommend the need for undeterred financial inclusion, transparent disclosures and that tax administrations to evaluate their existing compliance and risk management tools, strategies and policies in order to conform to international best practices, so as to ameliorate the dangers of fiscal corruption in the form of non or fictitious (under-declarations) and understand how responsive regulation concept can be applied to improve the concept of self-regulated voluntary compliance culture in their administrations. In conclusion, this paper seeks to proffer solutions as to how best to address this global financial leak through the act of taxation by strengthening existing tax handles towards efficiency and effectiveness.

Keywords: Panama Papers, Risk Management, Compliance, Taxation, Offshore Companies, Tax Haven, Accountability, Governance, Transparency, FATCA.

1.0. Introduction

The global economy is at a crossroad following the disclosures on the “Panama Papers” dubbed as one of the greatest leak in the world’s financial history. It is a global catastrophe and more dangerous than the newly created “Zika virus” from the taxation point of view. As a matter of fact, this leak of the 21st century has put the global economy at a cross-road and can be likened to be the world's worst “financial genocide” as it is a tax phobia cancer that denies national governments of due tax revenues, thus impacting negatively on global growth and development. Indeed, the ramifications from the released paper are likely to bear far-reaching consequences if left unattended to the global economy despite the safeguard measures already designed and built by financial managers, compliance strategists, risk management specialists, lawyers and policy analysts to mitigate risks of such unethical financial transactions. The leaked documents from a Panama Law firm called (Mossack Fonseca) relates to the offshore financial affairs of numerous individuals worldwide (Byrnes, 2016). In this context, the paper has unleashed global controversy on the use of offshore companies, as confusion erodes our minds with skepticism generated within the buzzwords of wealth creation and personal aggrandizement at the detriment of dodging the payment of taxes. Obviously, in our today’s world everyone is into wealth creation but we need to differentiate between the lines of wealth creation that contribute positively to growth and development and those within the confines of selfishly-driven investments for personal gains. However, the velocity on the viral of the paper is a welcome move to all and most particularly to modern tax authorities, as it comes at a time by raising alarms on their administrative lapses as in relations to probable inefficacies in their tax handles (accounting, collections, audit and enforcement) capabilities of domestic and international instruments on financial transactions.

The paper therefore has triggered the conscious need for an enlightened discussion with a more pronounced and concerted global action plans on the power of readiness to bring the perpetrators to justice in accordance to the laws of taxation. It is like a dagger pinch in the hearts of our national treasuries with the fraudulent acts of denying our economies the much needed financial resources (revenues) to spur growth in the epoch of development. This leak no doubt has objectively exposed the shameful corrupt practices of global leaders and individuals in business hitherto thought to be “the real gentlemen in business” (i.e. the saviors of people in terms of jobs creation, business development, growth and employment) as the principal perpetrators of this heinous crime.

Additionally, the leak serves as an opportunity for tax authorities all over the world to remain committed, firm and united by building robust tax compliance systems and risk mitigating strategies that are resilient in the fight against fiscal corruption (i.e. tax avoidance, tax evasion and tax aversion) respectively. Following the leaked documents, the Canada Revenue Agency (CRA) has embarked on an extensive audit programs in relation to offshore tax evasion including Canadian clients associated with the mentioned law firm (Byrnes, 2016). This is a good move and almost majority of European countries like Iceland (which resulted the resignation of the Prime Minister), the UK, Germany, USA, Italy, France, Spain and in South Africa just to name but a few have shown greater interest into the debacle of this financial disclosure as a way of publicly examining the rationale behind the incorporation of these offshore companies in tax haven jurisdictions and go after them by every possible means. They have agreed to share information on ultimate owners of companies with the objectives of making it more difficult for firms to funnel corrupt funds (OECD, 2016). Such initiative would be phenomenal and would deter such practices.

In consequent, answers are needed from our governments and institutions so as to know why we are “caught unaware” at gunpoint on such contrived financial lapses generated through insider-aided corrupt practices. This is the million dollar question that needs the much-needed answer as to why the predisposition of our global economy trading on such murky waters/paths that has far-reaching global financial consequences on our financial resources, where illicit trading or transactions are taking place across our national borders.

2.0. Taxation and the Leaking of Fictitious Transactions of Offshore Shell Companies

This current global financial mayhem is heart-rending and has exposed the conspiracy theories of the rich and wealthy individuals, businesses and government officials who deliberately and falsifying hide their wealth within the corridors of wealth creation through funds managed by Mossack Fonseca. Although, they are legitimately established but in actual fact they are engaged in marshaling wealth through fictitious transactions all geared to dodge the payment of taxes. This scheme is spearheaded by the mentioned firm with the aim of helping wealthy individuals and business to hide their wealth in offshore jurisdictions (i.e. places where “law abiding citizens are looking for better returns, more investment options and greater flexibility”) to pay lesser or no taxes at all.

There is no doubt that taxation is the life-wire of modern economies and has been recognised as a critical factor to the economic transformation and development of a country, particularly those outside the streams of endowed natural resources such as gas and oil by nature. Taxation is a compulsory levy imposed on a subject of a state or upon his properly, corporate bodies, institutions, etc., in order to defray expenses incurred by the government to provide security, social amenities and create conditions for the economic well-being of the society (Edame, 2011, Okoi and Edame, 2013). Jallow (2016, p2) has defined taxation as the “channelisation of resources for sustained economic growth and development to lubricate the financial muscles of many national governments in Asia, Africa and Latin Americas”. Simply, taxation is the engine of growth that lubricates the financial wheels of many countries to reinvest the collected resources for socio-economic development. Conversely, anything that goes to limits the optimisation of national revenues will significantly affect growth and development, hence impacting negatively to the lives and welfare of the people in general. This is what has been realised from the leaked “Panama Papers” where perpetrators have skillfully created anonymous companies and ghost corporations to dodge taxes by designing laws that suits their investment desires as legitimate, while in actual fact were illicit in nature. In the words of the British Prime Minister (David Cameron) when he was summoned by the UK House of Parliament to answer to questions on his tax status in April 2016. Prime Minister Cameroun harped on the need to “differentiate schemes designed to artificially reduce tax and those that are encouraging investment”. But the bone of contention here is that schemes that were designed to encourage investments were violated intelligently by the promoters of tax justice and governance to suit their selfish investment desires at the detriment of the states, thus glorifying the vices of aggressive tax avoidance and tax evasion to a large extent beyond human imagination and comprehension.

By the foregoing, tax evasion and aggressive tax avoidance schemes are constraint factors that would lead to a dead-end traps where the wealth of the world would be controlled by the few privileged class against the majority with heightened fear of abject poverty and the burden on the spoilt of taxation to be continually bear by the poor masses. This is the cyclical nightmare and systemic rhythm for the creation of such offshore shell companies in tax haven jurisdictions as spots for illicit financial transactions. For this reason, taxation goes along with the undeterred principles of citizenship conscience in terms of compliance, ethics, professionalism, equity, fairness, tax governance, accountability, transparency and responsibility as its impact is multidimensional and cut across all sectors of the economy (i.e. individual taxpayers, businesses/firms or companies and governments) all over the globe. What this implies is that the art of taxation requires reasonably the protective gears of fiscal measures in place (i.e. having the parameters of ethics with due diligence in the administration, collection, accounting, audit and enforcement) of taxes un-breached/ compromised.

The law of taxation requires every taxable person (i.e. individual, body of trusts or company) to pay their required taxes and on time. The payment of taxes goes along with responsibility and responsive regulation for the taxpayer and the tax administration. Responsibility refers to acts of mutuality that is reciprocated by both the taxpayer and the tax administrator in understanding their expectations, by meeting their required obligations as dictated by the tax laws. Responsive regulation on the other hand “is a process that “confidently and openly engages regulatees? to think about their obligations and accept responsibility for regulating themselves in a manner that is consistent with the law” (Braithwaite, 2007). In the words of Sparrow (2000), responsive regulation is about how regulators should behave rather than how regulation should be changed. What this implies is that regulators should always operate within the premise of the designed tax laws by ensuring systemic enforcements with the absence of any likely breach of reputational risk protocols as a result of erosive compliance culture or serious administrative lapses in the application of the tax laws.

To promote responsive responsibilities, modern tax administrations throughout the globe have established what is popularly referred to as the “self-assessment system (SAS) or the self-assessment tax regime (SATR). This regime allows taxable persons to determine their own tax liabilities and make payments accordingly, without any form of false or under-declarations. Despite, being an innovative tool-kit to promote the culture of voluntary, the SAS is challenged with the tendency where some taxpayers, would tend to understate their tax liability due to the absence of tax morality (Walpole, 2009). People feel that taxation is a complex matter, where there is no direct benefit in return for the taxes paid to the state (Jallow, 2009; 2013). Obviously there is a benefit as the taxes paid are further reinvested into the sectors of the economy to provide good health service delivery systems, provision of water, building of public schools, hospitals, roads, and bridges and in the form of protections to life and property for all and sundry. In this regard, many have deliberately chose not comply by refusing to enhance their knowledge in tax system (Palil, 2010; Sarker, 2003). To exert authority, responsibility and participation of all in the tax system requires extensive education and due enforcement, so that everyone sees him/herself as part and parcel to the growth, development and sustainability of the global tax systems, across all boundaries of the world.

The leaking of this sensitive document was orchestrated by the German newspaper called ?Sueddeutsche Zeitung?. They shared the information on the leaked documents with the International Consortium of Investigative Journalists (ICIJ). These are concerned people in the media who see it inappropriately and unethically to be muted or silence with such global onslaught. Many in the financial industry sees it as an intrusive breach to sensitive financial information but in actual fact it is not because if they were very much committed with an unequivocal culture of trust by upholding to the protocols of financial ethics in terms of reporting, payment, accounting, auditing and enforcing developed “rules of engagements” with due diligence, then we would not have gotten ourselves in this murky mess or sham. We need not to apportion blame as to why the leaked documents but rather look within and beyond the tentacles of this unabated crime, and see how best it can be addressed before the tendency of further unanticipated exacerbation of this ugly scenario. Obviously, the leaking of these leaked documents come not come at a better time than now as it brings into context by reporting and exposing the dirty games of the prominent and wealthy individuals, business and politicians who are engaged on ?off the traded-business window? with the intentions of hiding their wealth through the exploitations of offshore tax regimes such as (British Virgin Islands, Cayman Islands, Panama, etc.) as financially aided by financiers and hedge fund managers to cheat and defraud states of potential revenues through false declarations or under-declarations of their financial transactions.

3.0. Non-Enforceability on Global Tax Transparency Disclosures

Enforcement is unpredictably a natural phenomenon in which the law of nature called “Karma” is a living testimony that is inescapable, but applicable on wrongdoers for violating established protocols or laws, either nationally or internationally designed for corrective actions. For that reason, enforcement is a predictor that guarantees a healthy; truly, apolitical systems if applied without ?fear or favour? but in accordance to the enacted legislations. This is because partial enforcement always undermines the integrity of set laws or established institutions to police acts of wrongdoings, particularly within the shores of financial transactions. Following the publications of the Panama Paper, countries like Russia and China refuted and rubbished it as a "clandestine conspiracy theory? initiated by countries like the USA to dirt their images in the global public eye. This led to the censoring of the “Panama Papers” within their country’s jurisdictions, despite the report indicating that their political leaders and wealthy individuals are engaged in the schemes by the ?invisible hands?. From the look of things, there is irrefutably an “iota” of truth of the political elites and wealthy business individuals or corporation in the stream for ill-gotten wealth through establishing offshore companies in the afore-mentioned countries. It is worthy to note that these forms of censorship are mundane directions that picture a frame of suspicion for others to see the breadth and depth of such disclosures. There seems to be new waves of gullible acts due to administrative lapses in the execution of tax payments by tax administrators either as a result of loosely-designed tax laws or laws not effectively used or virtually impugned due to lack of political will. Accountability and transparency is the cornerstone of ethical governance programmes every tax administration must institutionalise as parts of their policies in order to objectively executive their entrusted mandates as a public institution (Jallow, 2013). According to Jallow (2013, p 57), “taxation is part of accountability between the state and the citizens, and non-citizens (real taxpayers), which demands for voluntary disclosures in terms of the revenue collected by the tax administration and the government equally to share it to the public, particularly as to how and where the collected taxes (revenues) are spend in the economy”. What this implies is that is there is a contract between the tax administration and the government. Likewise, a contract also exist between the taxpayer and the tax collector, vis-à-vis, all geared towards collecting the right amount of taxes from the taxpayers by the tax administrators and remit it to the government coffers (accounts). In such cases, government also has an obligation to fund the operational, management and financial budgets of the tax administration in a form of subventions or through on an agreed percentage to hold from the collected revenues (taxes) by the tax administration to finance its budget and also for government upon collecting all the required taxes is obliged by the constitution to provide the citizens (including the payers and non-citizens) with basic social services, roads, hospitals, energy and infrastructure developments, etc. Accountability and transparency injects an internalised-personality value system in people (taxpayers?) to trust a tax system that represents the personality and characters of the tax officials in discharging their entrusted public functions. Impactful revenue mobilisation is objectively dictated by the principles of transparency and accountability. Transparency from the perspectives of taxation refers to full disclosure by the tax administration on the quality and status of its procedures and administrative processes so that taxpayers? can make informed decisions in the payment of taxes. In other words, what an institution (tax administration) does in in raising revenues should be open to public knowledge and scrutiny, so that winds of probity and prudence must be vividly seen practiced as the its “modus operandi”. Accountability refers to the act of holding public institutions accountable for their stewardship through the legislative review and audit processes of national assemblies or house of parliaments. This take in the forms of the generally popularised as the public estimates committees and public accounts committee (PEC/PAC). The PEC has a broader mandate as it can ?suo moto? examine any expenditure. Its main task is to suggest ways of achieving economy and efficiency in administration. The PAC on the other hand exercises what can be called ?ex- post facto control?. It examines the expenditure after it has been actually incurred. Its main task is to see whether expenditure has been incurred in accordance with the authority parliament. Basically, these parliamentary committees are tasked with the responsibility of engaging public institutions in the form of parliamentary ?questions and answer session? to discussions in the national assembly to clarify certain issues, pick up their financial statements and in terms of their administrations, in relations to compliance payment and enforcement of procurement issues. As a matter of fact, the rhetoric of the ?Panama Papers? has alarmed our sub-conscious minds that the scourge of global corruption is on the increase despite many of our designed laws, policies, regulations and established institutions to ameliorate this dreaded disease consuming our acts of morality, integrity and ethics like wildfire across our national borders due to the advent of the beast of thieves in the hoods who go unpunished in their fictitious practices. This shocking story reveals realistically the unanticipated disclosures on world leaders (i.e. politicians and business magnets) whose names show up in the lists of wealthy individuals and businesses. We could fully remember that in 2009, the global leaders who attended the London G-20 Summit committed to the universal need in the drive to increase transparency and to eliminate tax avoidance by means of tax haven through well-coordinated mechanism of information sharing for better financial reporting accountability and probity. Obviously, there is no denying fact that the reason for establishing such offshore companies in tax-haven jurisdictions are for illegimate tax means to dodge the payment of taxes in the realm for private wealth creation and management. Notwithstanding, the commitment to fight tax evasion was followed by the ratification of numerous international financial instruments such as the Foreign Account Tax Compliance Act (FATCA) to share/exchange financial transactions information through the traded windows of the banks (national central banks). This brings us into perspective as to the relevance of the enacted FATCA legislation, given the current saga of leaked fictitious underreporting, declarations or false disclosures by wealthy individuals and businesses in their financial transactions to avoid paying taxes. In essence, it questions the credibility and competent jurisdictional enforcement capability of FATCA in ensuring compliance, as to why such clamoured criminal activities driven by selfish agenda to amass ill-gotten wealth, outside the tax net. The United States been the initiator of this legislation is identified as the third nations in the world for offshore transactions in the realm of hiding money away from tax purposes. This therefore, questions the rationale of hiding assets and still insisting on assets declarations through FATCA, while being the violator in disguise. Wow! What an interesting drama that ubiquitously resonates global hypocrisy and practices of double standards in financial transactions. In a nutshell, FATCA is a legislation that primarily aims to prevent tax evasion by US taxpayers by using non-US financial institutions and offshore investment instruments. This piece of legislation is initiated by the United States Department of Treasury (Treasury) and the US Internal Revenue Services (IRS) to encourage better tax compliance (FATCA, 2010) through the ratifications of the Inter-Governmental Agreement (IGA). The IGA is an agreement between the US and specific countries to build FATCA compliance into the country’s legal framework so that the country can implement FATCA. In consequent, a ratified IGA protocol requires financial institutions to provide the information on US accounts which they hold either directly to the IRS or to the local tax authority of the resident country. By and large, FATCA requires Financial Institutions to identify accounts held directly or indirectly by US Persons and to report the relevant account information to the IRS. In order to ascertain customers? US or non-US tax status, FATCA requires Financial Institutions to collect additional information or documentation from customers. What this implies is that the law (FATCA) requires almost all of the banks in the world to register with the IRS if they want the privilege of earning, moving, or even touching U.S. source income. The questions that comes to our minds is after the post-implementation of FATCA, where are we now? What has happened to the established reporting mechanism? Are the enforceable handles effective and properly utilised by our financial institutions? Are we better now in terms of financial reporting and exchanging of information? and has it been able to meet or satisfy our desired needs in the drive towards the incentivising the culture of self-regulated voluntary compliance culture. These are many of the questions and assumptions that require all of us to think deep and find real answers so as to collectively exhume this excoriating wild fire gushing from the walls of our most treasured assets (revenues).

4.0. Way Forward in addressing this Global Menace

The revelations of the ?Panama Papers? is a global shocker that has studiously alarmed the concerns of tax administrators in their inefficiencies in terms of monitoring and enforcing their tax handles with the need to prioritise more attention on their risk management and compliance programmes. There is no denying fact that this paper exposes the sham on financial impropriety by so- called proponents of tax governance, financial accountability and transparency in reporting financial transactions all geared to weaken the established protocols for effective and efficient exchange of information. The perpetrators of this fictitious or under-reporting saga are driven by inglorious intentions that are far-fetched and pollinated with double standards in their ideals, as their actions are in total contravention to the agreed and signed international financial protocols and laws in financial transactions declaration. Instead, they are been glorified, hence making it go viral and now as part of the norms of the privileged few. The age of financial crisis has witnessed They have turned the cycle of finance around to suit themselves by cunningly eschewing schemes to go unnoticed or covered in the reporting of their financial obligations in offshore jurisdictions.

Base on the above discussions of the paper, the following recommendations are many of the strategies proposed to address this global financial misreporting or under-reporting:

i. Enhance the limited roles of tax administrations by granting them access to banking information of customers through the use of technology for creating accountability to monitor their financial transactions and ensure that their tied funds or investments pay the required taxes they are obliged to pay by the tax laws.

ii. Establish tax treaties and tax information exchange agreements (TIEAS) so as to enhance our abilities to obtain information, to enforce laws and making sure that those with operations and investments across borders pay their appropriate share of taxes to the tax jurisdictions concern.

iii. Review our poorly designed laws where the perpetrators of this crime capitalised to suit their needs in the form of tax avoidance by making it more robust and unbreakable. This is one of the major problems facing tax administrations. In view of this, national governments through their assigned tax agencies/authorities need to strengthen their tax laws to make it more difficult for individuals and businesses to dodge tax.

iv. National Governments such make the feasible collaborations between tax administrations and central banks in a form of institutional collaboration and networking to effectively coordinate in information sharing so as to effectively enforce the taxation laws on financial transactions and mitigate any lapses that may result to non-payment of taxes.

v. Establishment of an anti-global tax avoidance and evasion commission mandated to police laws by Institutionalising well-coordinated enforcement agencies across tax authorities/administrations with uniformed policies to work and punish tax defaulters (treacherous dodgers/cheaters) who are engaged in the business of offshore accounts to cunningly escape tax payments.

vi. Ensure that all countries and most particularly developing economies have access to international electronic funds transfers (IEFT), information from offshore tax information program (OTIP) and exchanges with treaty partners.

vii. Address all the defective financial reporting systems so as to save the global economy from the incidence of malfeasance financial transactions.

viii. Promote transparent disclosures through financial inclusion of all.

ix. Institutionalised whistleblowing system and establish laws that protect the identity of whistle-blowers.

x. National governments should complement fiscal policies with monetary policies in order to achieve inclusive macro-economic objectives for global growth and development.

xi. Since taxation is an inevitable source of government revenue, the problem of double taxation should be avoided, tax incentives in the form of tax cut should be provided to tax payers, and

xii. Tax administrations need to evaluate their existing compliance and risk management tools, strategies and policies in order to conform to international best practices, so as to ameliorate the dangers of fiscal corruption in the form of non or fictitious (under-declarations) and understand how responsive regulation concept can be applied to improve the concept of self-regulated voluntary compliance culture in their administrations.

There is however no “one best way? of solving the quagmire of this global financial sham of this magnitude. The reason had been that not one size fits all in a technologically-driven world where nations are at different level of robustness in their financial capabilities depending on their innovations in science and technology, educational levels, possessed skills, competence and willingness to continuously invest on research and development for effective accountability and transparency in financial reporting and transactions. However, the best strategy that can bring a significant change in the behavioural (minds and hearts) patterns of people is to vigorously invest in ethics programmes which are capable tools to make people (i.e. wealthy individuals and businesses) to behave ethically with high spirited zeal of integrity and moral precepts in the drive towards wealth creation.

5. Conclusions

The scandals surrounding the "Panama Papers" shows offshore jurisdiction still remain attractive locations to hide wealth by wealthy individuals and businesses. Therefore, we need to ask ourselves as to how prepared are we to address this global financial scourge and bring cheaters and deliberate violators to justice. Keeping quiet over such sensitive financial issues could threaten the future of sustainable financial resource generation, management, control, audit and enforcement. However, it has become imperative to approach the panama papers with great caution from all spheres of the global institutions so as to collectively join this noble endeavour to save our national economies from the wrath of tax defaulters, deliberate non-payers who are operating in the financial circle, creating wealth without moral responsibility to contribute to national governments on the shares of their wealth.

This paper aims to understand modern tax administrations practices in relation to tax compliance and risk management programmes in the drive towards mitigating fictitious financial transactions in the global financial system. The study also explores the application of tax governance through global tax transparency disclosures in encouraging voluntary compliance. As discussed in this paper, weak institutional measures, ineffective tax handles and poor enforcement are factors responsible for the poor monitoring and accountability of these established offshore companies to dodge taxes. However, only few developing economies have access to international electronic funds transfers, information from offshore tax informant program and exchanges with treaty partners while many are left off-the hook for systemic coordination in the fight against illicit trades and financial transactions. They are known also known to be constrained with limited resources to invest in modern IT infrastructure to enforce compliance. Findings from the paper reveal that enhancing the limited roles of tax administrations to have access to financial information or transactions of individuals or business from the banks would be a better strategy to address this unanticipated problem.

The paper contributes to the current knowledge of financial transactions through the use of effective compliance risk management practice in tax administration. The findings can provide a platform for modern tax administration in the globe and most importantly to developing countries to evaluate their existing risk management practice and understand how risk-based responsive regulation concept can be applied to inculcate a tax moral culture in order to enhance self-regulatory voluntary compliance in their administrations.

To cavalierly stem the dirty tricks of wealthy individuals and business, by discussing such financial crime and proffering tangible solutions requires no extra time as in the game of soccer or football. It need no further political pronouncements but rather the due enforceability of the ratified protocols and brings perpetrators to justice, immediately. However, tax administrations are required to intensify efforts by reviewing their tax policies, regulations and laws to be in conformity so as to address this global menace. Even though in as much offshore shell companies are legally established, they could still be used as tools for money laundering schemes and other financial crimes that could result to terrorist financing if not properly monitored.

In conclusions, a wise man once cautioned: “You can run away from your responsibilities but you can never run away from the consequences.” We need to make the designed protocols (laws, policies and regulations) aptly applicable in reality and not on the pretext for the sake of administrative formality in paper. We need to move from the cancer of inapplicable laws to the basis of actions. Therefore, the proffered recommendations above if implemented, not only are likely to lead to better scrutiny but will reduce any unforeseen vulnerability to the vices of aggressive tax avoidance schemes and tax evasion.

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