It took almost a year for the team of ICIJ to reveal the world’s biggest leak till date. The Panama papers expose the names of people from across 200 countries who have been alleged for tax evasion.
A massive data of approximate 2.6 terabytes was leaked by the Panamanian law firm called Mossack Fonseca. The firm has been helping its clients to set up shell companies in various tax havens across the world. World leaders, corporate giants, athletes and various celebrities have been accused of investing in these offshore shell companies.
In India before 2004, RBI didn’t allow any foreign exchange. But after 2004, RBI liberalized its norms and permitted an individual to remit upto $25000 for buying shares or property, gifting money and for educational and healthcare purposes. By 2016, this cap of $25000 has been increased to $250,000. But the RBI strictly prevented any individual from setting up any offshore company to benefit or boost his/her investments. In 2010, it even came out by answering the questions asked through FAQs, to say that its guidelines don’t allow any acquisition or establishment of offshore entities. It was only in 2013 that RBI gave a window of setting up a hundred percent subsidiary or investment in a joint venture, through ODI (Overseas Direct Investment).
The Panama papers break the layers of secrecy regarding the ownership of these offshore entities. It is now upto the RBI to set up an enquiry for the individuals who have been involved in investing in these companies before 2013.