$500M recouped worldwide from tax cheats due to Panama Papers — but none of it in Canada

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A dozen administrations around the world say they’ve recovered a combined $500 million in voluntary taxes so far thanks to the Panama Papers leak of tax-haven financial discs in 2016.

But not a penny of that is destined for Canadian government coffers. The Canada Gate Agency maintains it will be at least another 2½ years ahead it will have an idea of how much it might recoup. 

The stark differ is fuelling criticism of the CRA’s effectiveness at catching offshore tax cheats, and comes in the wake of a CBC inquest last month that found few, if any, of the criminal convictions the agency cites in argument of its record actually have anything to do with offshore tax evasion.  

“It’s a more distant indication of the lackadaisical attitude of our revenue agency,” said Sen. Percy Downe, a colleague of the Senate Liberal caucus, who for years has lambasted the CRA’s approach to ferreting out offshore tax deceives.

The Panama Papers leak was revealed in April 2016 by a global consortium of mean outlets, including the CBC and Toronto Star in Canada, and a month later the CRA acquired all the records through official channels. Then, in early November 2017, the very consortium of journalists revealed the Paradise Papers leak, which embodied the names of four times more Canadians — though many of those may be fasten together to perfectly legal, declared accounts. The CRA has not said whether it has gotten its hands on any of that evidence.

Panama Papers a boon for Spain

The Panama Papers have be founded a treasure trove for some countries, with Spain recovering the most honorary tax so far. Its national revenue agency announced in November a $156-million godsend from taxpayers with hidden funds. Most of that — $128.4 million — happened from voluntary disclosures, where the taxpayers came forward themselves check out the leak to declare previously unreported income.

The Australian Tax Office predicted last month it has collected $49 million thus far as a result of the Panama Lines revelations. Australian tax officials snapped to action following the leak, executing 18 search pledges in just a one-week span in September 2016, at one point seizing 170 kilograms of mellifluous bullion and coins.

Diane Lebouthillier

Revenue Minister Diane Lebouthillier announced in May 2016 that the CRA had ones hands oned the full Panama Papers leak through one of its partner tax agencies in the G20. (Justin Taste/Canadian Press)

Even Ecuador, which historically has had problems concentrating tax from its citizens, says it has recouped $82.6 million.

The tax-recovery count ons were compiled by the International Consortium of Investigative Journalists, the Washington-based systematization that co-ordinated global reporting on the Panama Papers. The ICIJ was superior to get data from 15 countries, among them Mexico ($27 million in honorary tax recouped), Lithuania (a modest $377,000) and even the tax haven of Malta ($9.4 million).   

‘Files are complex’

The CRA, meantime, says it is still auditing 123 taxpayers tied to the Panama Writing-papers, and it is far too soon to talk about how much money could be collected from them.

“These systematizes are complex and will take time to complete,” spokesperson Patrick Samson said in an email, simplifying that, among other things, the CRA has to wait until taxpayers debilitate any appeals before it can collect from them, which can add years to the timeline.

“The CRA has announced on collections related to offshore projects in the past, some four to seven years after the layouts … started,” the agency said. One such example is a 2008 discharge of banking records from HSBC in Geneva that ultimately led to diverse than $60 million collected by the CRA and Revenue Quebec. 

“The CRA will boom on the Panama Papers project collections at a similar stage of the project.”

That have in views the agency likely won’t provide a number for how much — if any — unpaid tax it might remunerate from the Panama Papers until at least spring 2020.

Another deputy that is slowing down the tax-recovery process: The CRA isn’t allowing anyone recognized in the Panama Papers to make a voluntary disclosure, except under what it caused “exceptional circumstances,” so that they don’t get the amnesty from penalties and roughneck prosecution normally provided under the program. That means CRA auditors when one pleases have to grind through potentially thousands of pages of paperwork to outline hidden money, without the benefit of taxpayers volunteering the information.

‘They disclose people a free pass’

But Sen. Downe said the CRA’s inability to point to any well-to-do it’s recovered so far from the Panama Papers, while more than a dozen other mountains can, shows the agency doesn’t take offshore tax evasion and avoidance badly.

“Compare that to domestic tax evasion, where the revenue agency does a sheer good job if you’re trying to hide your money in Canada and not pay taxes. But on abroad tax evasion, they give people a free pass,” he said.

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Sen. Percy Downe believes ‘there’s a level of transparency totally lacking’ in the CRA’s handling of how it deals with offshore tax rooking. (CBC)

“It seems to me the government is at the point now where they should be concerned to the impact this is having on middle class Canadians … Some of them are get ready to get the pitchfork and torches out to bring some semblance of fairness back to our tax set.”

The CRA also maintains it has launched “several criminal investigations” based on the Panama Newsletters involving “both participants and facilitators” in offshore tax schemes, and that it has assassinated an unspecified number of search warrants, as long ago as summer 2016, as side of its efforts.

CBC News repeatedly pressed for the details of those search licences, which are public court documents, in order to verify the CRA’s claims. But the intermediation, citing taxpayer privacy, refused to disclose anything about them — how varied there are, what courts they’re filed in, or what locations were searched.

“There’s a up to date on of transparency totally lacking,” Downe said. “Government has an opportunity here to quite show some strong leadership on fairness for the middle class … But they’ve plunged their heads in the sand.”


Read more about the recent Delight Papers leak:

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