Direction: A passage has been given below. Few words and sentences have been highlighted to help you answer some of the questions. Read the same carefully and answer the questions that follow:

On October 3, the ICIJ released the Pandora papers. The collaborators included media organizations like the BBC and The Guardian from the UK and The Indian Express from India. The data is in 11.9 million files, consisting of documents, images, emails, spreadsheets, presentations, audio and video files and even ink on paper. The work was done mostly in secrecy, over nearly two years. While the records go back to the 1970s, most of the data pertains to the period from 1996 to 2020. What the Pandora Papers reveal are the financial dealings of the super-rich, including politicians, businessmen, sports stars and celebrities. They provide data on secret private trusts ‘settled’ or placed in obscure offshore tax havens and the identity of the ultimate beneficiaries of the wealth in those trusts. The data also reveals the multi-layered complex structures, possibly constructed to hide the identity of ultimate beneficiaries. There are shell companies within offshore shell companies, which safeguard wealth in the form of cash, shares, real estate ownership, aircrafts, yachts and art. The multiple layers of ownership are to make it difficult to trace the true ownership and beneficiaries.

There are at least 380 persons of Indian nationality in the Pandora Papers. These include some against whom investigations are ongoing for financial fraud, and some whose revelation has raised eyebrows. There is data on more than 130 billionaires from various countries. What is different about the Pandora Papers from the earlier Panama Papers leaks, revealed by the ICIJ five years ago? Unlike the Panama Papers which were leaked from a single source, a law firm called Mossack Fonseca, the Pandora Papers are sourced from 14 different providers, whose identity has been concealed. It is a much more comprehensive picture of how the wealthy shift their wealth across tax jurisdictions, possibly to evade taxes or to have a system of ‘more efficient tax planning’. For decades, big companies like Apple, Google and Amazon have hooked profits from their European and global income in the low-tax haven of Ireland. That will now end. Indeed, the European Union has imposed a fine on Ireland for such irresponsible taxation, which amounts to ‘stealing the taxes’ of other jurisdictions. Leaving aside the fugitives who have defrauded banks, or defaulted on large loans from public sector banks, another issue to think about is that even if the wealth has been salted away legally, does it reflect a flight of capital? Are high net worth individuals moving significant assets abroad? What is their anxiety? Do they feel their wealth is not secure in India? If India were to open up its capital account completely, would we see a massive flight of capital? The Pandora Papers raise a lot of issues that need serious introspection. However, one hopes that like the Panama and Paradise Papers, they don’t become forgotten headlines in a fortnight.

Q:

Which of the following issue/(s) need/(s) a serious deliberation as per the Pandora papers leak?
(i) The high-net worth individuals feel that their wealth is not secure in India.
(ii) Is there a fear of returning the estate duty?
(iii) Is there going to be a fair allocation of profits and taxable income?

• 1
  Only (ii)
• 2
  Only (i)
• 3
  Both (i) and (iii)
• 4
  All (i), (ii) and (iii)
• 5
  Both (i) and (ii)