The scandal is that more of us don't have offshore accounts.

April is already a traditional time for scandals related to offshore finance and tax evasion to erupt. Exactly three years ago, we were talking again about leaked information from a consulting firm in the so-called "Offshore Leaks" affair, where incriminating documents came from the British Virgin Islands instead of Panama.

Back then, it was about hidden assets of famous people in politics and business - from close associates of French President Hollande to the husband of a German billionaire to relatives of dictators and Asian politicians. Currently, we are observing a similar scenario, but with higher stakes - corruption reaching the highest levels of the Russian Federation is being directly commented on, accounts of current politicians from Western Europe to China, lists with dozens more names of world politicians, entrepreneurs, celebrities and sports greats are expected - a whole 2.6 terabytes of data were embezzled by the Panamanian firm Mossack Fonseca.

Why “bad” offshore destinations exist

The organization that obtained the Panama Papers - the International Consortium of Investigative Journalists - published a video in which it equated offshore destinations with both perpetrators of atrocities in the Syrian war and Russian child rapists. In this way, it joined a long-standing campaign by governments, supranational organizations, media and NGOs against the existence of tax haven locations.

There are quite good reasons for the existence of destinations with some combination of low taxes, guaranteed bank secrecy and a liberal regulatory regime. First of all, it is the natural desire of every individual or company to minimize their costs associated with paying high tax rates. This is something that Bulgaria benefits from through our relatively low corporate and income taxes - the so-called flat tax is a strong magnet for foreign capital. The point is that in real offshore destinations we are usually talking about rates that are below 10% - such as Malta, where the corporate tax can reach 5%, various Swiss cantons, where there is a direct negotiation of the rate based on the amount of capital brought into the jurisdiction and we get to "oases" such as the Isle of Man with 0% corporate tax.

Secondly, we are talking about the much sought-after and increasingly rare opportunity to anonymously dispose of property with guaranteed banking secrecy. Something that is an inalienable right of every individual – to decide with whom and how to share information about how much they earn and in what (legal) way they do it. A right that has recently become increasingly difficult to exercise in view of the regulatory regimes imposed on the global banking system. The increasingly aggressive policy of certain governments to pursue their citizens and companies to pay taxes regardless of their geographical location (let us recall the recent idea of the American and British tax administrations to tax Google for its activities in Ireland) is associated with active pursuit and pressure on offshore jurisdictions to request and then provide information about the companies that operate on their territory.

In practice, in this area, offshore destinations build on a very easy and relatively well-functioning mechanism for concealing the real owner of a company or other asset – the so-called nominee directors or proxy persons. They may be local citizens who have adopted this activity as a profession, as we often see for companies commented on in the public space in our country, or trusted/close to the real owner, as we have in the case of Putin and the Icelandic Prime Minister.

The scandal is political corruption, not tax evasion

There is nothing scandalous about wealthy entrepreneurs looking for the best place for their assets. Tax competition is a good thing, like any other kind of competition – it should create incentives for government leaders to pursue a more reasonable taxation policy (although they are more likely to try to crush competition than to participate in the competition). There is also no moral problem when we talk about the fact that, for example, Messi has taken his money away from the clutches of the Spanish tax authorities. After all, government levies are a form of forced seizure of property, something that no one explicitly agreed to, and which they cannot refuse without sooner or later ending up behind bars.

In this sense, taxes are an “obligation” imposed by coercion, by force. The government has a “right” to 40-50-60-70% of what we produce, only because of its monopoly on violence. An explanation should be sought not from athletes, singers or entrepreneurs why they move their money to Panama, but how some institution can claim half (or more) of their labor. To paraphrase a popular saying – if stealing 100% of another person’s labor is slavery, how many percent is not?

We come to the real scandal – with those who spend other people’s money – the two-faced political class. Two-faced because everyone (especially those who cannot afford tax consultants) has to pay “their share”, provide all kinds of information to a series of bureaucratic and police services, while these same so-called public funds are sucked into the accounts of the gentlemen and ladies who talk passionately on television about the “taxpayer’s debt to the homeland”. Pay taxes so that there is something to steal, after all.

And we are not just talking about prime ministers like Gunnarsson and Cameron, or satraps like Vladimir Putin and his Chinese counterparts. We are talking about an a la carte selection of criminals who exist thanks to some form of state violence – whether they are Hezbollah terrorists, Mexican drug lords or North Korean regime supporters. The responsibility for the existence of these people does not lie with the Delaware tax system or the Panamanian privacy protection system – it lies squarely with those who speak out against tax avoidance and against the existence of tax havens, these same political leaders.

Even after all the information from the Panama Papers is thoroughly reviewed, the big question remains - how long will the people who create and participate in corruption (hiding in offshore accounts) be able to edifyingly demand half of our income every month. And how long will those who run away from the robbery be the bad guys, and the perpetrators - the moralizers from the pulpit.

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