Panama Papers: More Governments React, Launch Probes

The International Tax Monitor delivers daily news and analysis from the world's financial and business centers, with a focus on tax and accounting developments affecting transnational enterprises.

By Anjana Solanki and Yoonah Lee

April 6 — Indonesia, Pakistan, Singapore, South Africa, Taiwan and Thailand joined the chorus of nations announcing they will open investigations of their citizens named in leaked documents that revealed billions of dollars in assets hidden in tax havens.

Governments were quick to act, as the 11.5 million files published by the International Consortium of Investigative Journalists contained the names of 140 politicians from more than 50 countries connected to offshore companies in 21 tax havens.

Pakistani Prime Minister Muhammad Nawaz Sharif announced in a live address to the nation, in response to allegations against members of his family, that he will set up a high-level judicial commission, headed by a retired Supreme Court judge, to probe the matter.

Mexican Congressman Ramirez Marin called for Mexicans identified in the so-called Panama Papers to report themselves to the Tax Administration Service and confirm income reported on their tax returns.

In Indonesia, Finance Minister Bambang PS Brodjonegoro stated that Indonesia must have its own intelligence sources to validate the data source for the leaked documents. He spoke at a seminar on a draft bill that would provide tax amnesty in Jakarta. The minister said that the current information does reveal a pattern of Indonesians who create shell companies in tax havens.

Costa Rica said it is assigning extra personnel to its tax agency to take a close look at every person, firm and legal office mentioned in the scandal, and also will seek a tax information exchange agreement with Panama.

South Africa 

South Africa Finance Minister Pravin Gordhan gave the go-ahead for the tax authorities to investigate citizens named in the documents, and noted that a 2016 budget proposal would make it easier for non-compliant individuals and entities to disclose offshore income and assets by relaxing the existing rules for a special voluntary disclosure program.

The treasury agency said South Africans involved in businesses offshore “need to ensure that they do not fall foul” of the country's tax rules, including the Exchange Control Regulations 1961, the Income Tax Act 1962, and the Tax Administration Act 2011. However, it did note that “holding funds in an offshore bank is by itself not illegal, as long as the necessary approvals and disclosures have been made to the relevant authorities.”

If the tax amnesty scheme is adopted by parliament and enacted, both the South African Reserve Bank and the South African Revenue Service will relax the existing voluntary disclosure program rules from Oct. 1, 2016, to March 31, 2017, the treasury said.

Like other government announcements, the South Africa statement called attention to proposed or newly enacted anti-tax evasion measures. In South Africa's case, Gordhan touted the draft Financial Intelligence Center Amendment Bill 2015, designed to heighten know-your-customer rules and reveal the beneficial ownership of companies. The ministry also stated that South Africa was an early adopter of the Organization for Economic Cooperation and Development's common reporting standard, and will collect information from 2016 and begin automatically exchanging the information with other nations in 2017.

Singapore, Indonesia, Taiwan, Thailand 

In Asia, a host of other nations said they are examining the leaked data.

Authorities in Singapore, Taiwan, Indonesia and Thailand said they plan to launch their own investigations into respective citizens listed in the reports.

In a statement e-mailed to Bloomberg April 5, Singapore’s Ministry of Finance and Monetary Authority said it won’t hesitate to take firm action if it finds evidence of wrongdoing. “Singapore takes a serious view on tax evasion and will not tolerate its business and financial centre being used to facilitate tax related crimes,” it said.

“The relevant agencies in Singapore are reviewing the information being reported in connection with the so-called Panama Papers and are doing the necessary checks. If there is evidence of wrong-doing by any individual or entity in Singapore, we will not hesitate to take firm action,” the ministry said.

Meanwhile, Indonesia's Jakarta Post cited the Finance Ministry's director general of taxation, Ken Dwijugiasteadi, as saying the relevant authorities would probe possible local tax evasion cases.

Thailand's Bangkok Post said in an April 6 report that the Office of the Auditor-General has asked the Revenue Department to look into tax payment records of Thai nationals named in a list of people allegedly using a Panama-based law firm for offshore holdings.

The Taiwanese Finance Ministry agreed to set up a task force to investigate Taiwanese using offshore companies to avoid tax, the Taipei-based Economic Daily News reported, citing Finance Minister Chang Sheng-ford.


Malta Finance Minister Edward Scicluna sought to defend the country's tax system as a legitimate tax center. “Malta is no tax haven,” Scicluna told lawmakers in Valletta April 6.

Scicluna said Malta, which U.K.-based aid organization Oxfam has said is a tax haven for the wealthy, vowed to fight any attempts by the European Union to impose new regulations that might damage Malta's global competitiveness.

“Protecting the financial services industry in our country from competitors in other countries who will use this campaign to undermine our competitive stand must remain a priority for all,” Scicluna said.

With assistance from David Haskel, Andrea Tan and Harry Suhartono.

To contact the reporters on this story: Anjana Solanki in London at and Yoonah Lee in Washington at

To contact the editor on this story: Rita McWilliams at