By Press Association From Maol On Line

David Cameron has set out new measures to make it harder for people to hide the proceeds of corruption offshore, as Jeremy Corbyn and George Osborne published details of their tax returns.

The Chancellor’s release showed he received a total taxable income of £198,738 in 2014/15, including £44,647 in the form of dividends and rental income of £33,562, and that he paid income tax of £72,210. The figures showed Mr Osborne was earning enough to benefit from his cut in the top rate of income tax from 50p to 45p.

Meanwhile, Mr Corbyn declared just £1,850 of taxable income in 2014/15 over and above his parliamentary salary. The Labour leader had to pay a £100 fine after filing the return late.

In a Commons statement, Mr Cameron – who published details of his own tax return at the weekend – said he believed there was a “strong case” for the Prime Minister, leader of the opposition, chancellor and shadow chancellor to make their tax affairs public, but did not think the same should apply to all MPs.

“If this were to come in for MPs, people would also ask for a similar approach for those who ask us questions, those who run large public services, or lead local government, or indeed those who edit the news programmes or newspapers,” he said.

“I think this would be a very big step for our country, it certainly shouldn’t take place without a long and thoughtful debate and it is not the approach that I would recommend.”

Labour complained that Mr Cameron and Mr Osborne had avoided “full disclosure”, as they published summaries of their returns which were “as transparent as dishwater” rather than releasing the original documents.

Shadow chancellor John McDonnell repeated Labour calls for an independent inquiry, adding : “T his is not about individuals, it’s about trust and fairness at the top of government. As we now know, when the Chancellor was cutting the top rate of income tax for people like himself, while at the same time saying he wasn’t wealthy enough to benefit, he was also cutting public services and support for some of the most vulnerable in our society.”

Mr Cameron accepted that he had not handled the row over his father’s Blairmore unit trust well, after a torrid week in which Downing Street’s response to the leak of the so-called Panama Papers changed several times.

But he said he had been “angry” over “some deeply hurtful and profoundly untrue allegations” against his father Ian Cameron, who died in 2010.

“I know he was a hard-working man and a wonderful dad and I’m proud of everything he did to build a business and provide for his family,” the PM told MPs.

Mr Cameron, who inherited £300,000 from his father and received gifts worth £200,000 from his mother Mary, said it was “natural human instinct” for parents to want to pass assets on to their children.The tax rules “fully recognise” that parents may make gifts to their children tax-free while they are alive, and this was “something that we should not just defend but proudly support”, he said.

The Prime Minister said it was right to “tighten the law and change the culture” to crack down on evasion and aggressive avoidance”, but the Government should “defend the right of every British citizen to make money lawfully”.

Mr Cameron announced that most British crown dependencies and overseas territories have now agreed to share information in future with UK police and law enforcement authorities.

“For the first time UK police and law enforcement will be able to see exactly who really owns and controls every company incorporated in these territories – Cayman Islands, British Virgin Islands, Bermuda, Isle of Man, Jersey, the lot,” Mr Cameron said.

The Prime Minister said similar agreements were expected soon with Guernsey and Anguilla. And he confirmed plans to legislate this year on the Conservatives’ manifesto commitment to create a new criminal offence for companies which fail to prevent their representatives facilitating tax evasion.

Meanwhile, the Government will provide £10 million for a new cross-agency task force to analyse the information contained in leaks linked to Panamanian law firm Mossack Fonseca.

But Mr Corbyn dismissed the PM’s statement as a “masterclass in the art of distraction” and accused Mr Cameron of failing to appreciate the public anger over the ” scandal of destructive global tax avoidance” revealed by the Panama Papers.

“What they have driven home is what many people have increasingly felt – there is now one rule for the super-rich and another for the rest,” he said.

“I’m honestly not sure that the Prime Minister fully appreciates the anger that is out there over this injustice.”

And tax fairness campaigners said the new measures did not go far enough.

Christian Aid said that the announcement amounted to a “climbdown” on Mr Cameron’s previous support for public registers of companies’ beneficial ownership.

“The Prime Minister himself knows that central registers do not solve the problem and that to curb the sort of activities exposed in the Panama Papers, the public, journalists and other businesses must be able to see those registers,” said the charity’s Toby Quantrill, who challenged Mr Cameron to announce a date for overseas territories to make information public ahead of an anti-corruption summit he is hosting in London on May 12.

Oxfam also called for public registers, saying that Mr Cameron “needs to do better than this”, while ActionAid’s Charlie Matthews said: “Today’s proposals will not be enough to curb the massive corporate tax avoidance connected to UK-linked tax havens like the British Virgin Islands.”

During his time as Labour leader Ed Miliband hit back after his late father Ralph was criticised in the press.

He told ITV’s The Agenda : “I understand the Prime Minister defending his father and I understand it was upsetting for him and his mum and all of that.

“I think we have got to use this as a moment to understand what is going on here. For a long time in this country and indeed across the world we’ve taken the view that when it comes to the richest in our society – I’m not talking about the Prime Minister but just in general – we need to be nice to them by either giving them tax breaks or lowering their taxes or giving them some kind of special deal.

“We have this in this country with non dom status. You can live here and work here and not pay taxes here.

“The big question for our country is not so much for me about the Prime Minister’s affairs and the details, but what are we actually going to do?”

IMAGE: George Osborne published his tax return as David Cameron faced MPs about his own previous offshore investments

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Related story:

Panama Papers have unintended consequences

By Mohamed A. El-Erian From Newsmax

The revelations about offshore accounts that came to light in the so-called Panama Papers will reinvigorate government efforts to rein in not just tax evasion, which is illegal, but tax avoidance, too.

They will also add to popular frustration that will challenge the authority of some government officials. The uproar will bring about enhanced enforcement measures. yet there also will be unintended consequences that will further erode the credibility and effectiveness of the political establishment, including its ability to govern from the center, which is already being tested.

In the wake of the global financial crisis, and given the alarming surge in wealth inequality, the governed will prove far less accepting of the legal distinction between tax evasion and tax avoidance. Both are now viewed not just as “tax dodges,” but also as the unfair perks of the better-off and more-connected members of society in many countries.

Enter last week’s “Panama Papers,” the trove of more than 11 million pages of documents from Mossack Fonseca, a Panama-based law firm. The documents suggest that in both advanced and developing countries, some of those who hold power, and those with access to them along with the “rich and famous,” used the firm to establish and manage offshore entities that are designed to protect capital and minimize taxation.

The political repercussions were immediate, and are likely to spread. Already, the scandal has led to the resignation of Iceland’s prime minister, to a political outcry that has required U.K. Prime Minister David Cameron to release his tax returns (a first for Britain’s top elected official), and has abruptly ended the political honeymoon of Argentina’s new president, Mauricio Macri.

In addition, countries including Germany are stepping up efforts to look into curbs on legal, but morally questionable tax avoidance schemes that benefit the wealthiest. As with earlier steps to limit money laundering, the focus will be on more stringent reporting requirements, better international sharing of data, and more closely coordinated cross-border verification and enforcement efforts.

These changes will be quite visible; and will have a meaningful impact for those who, until now, have found it easy to use offshore financial vehicles to reduce their tax payments. The measures’ effects on politics and governance, while they will be less visible, could be more consequential for broader segments of society.
The Panama Papers are yet another blow to the political establishment. They amplify popular resentment toward governments that already are perceived by a significant segment of the population as turning a blind eye to tax-dodging. That anger is stoked by disclosures that some high-ranking officials also availed themselves of the shelters. And though no laws were broken in most cases, the documents will feed the perception that the privileged are allowed to play by different rules.

Indeed, for many, the Panama Papers are reminiscent of a broader phenomenon that played out in the run-up and the aftermath of the 2008 global financial crisis: The perception of a system run and managed by a political establishment that serves the rich and connected and fails to hold these elites accountable for the damage they cause to the rest of society. There is still notable residual resentment that very few bankers were brought to justice for their role in a financial debacle that caused significant misery and almost tipped the world into a devastating multiyear depression.

By stoking residual anger and fueling anti-establishment movements, the Panama Papers will make it even harder for the established parties to come together and implement policies aimed at overcoming years of sluggish economic growth, worsening inequality and artificial financial stability.

In addition, two other developments last week also eroded the credibility of the political establishment: the failure of the Dutch government to convince citizens to back European Union membership for Ukraine, and the turnaround of a growing number of members of the Republican establishment (including Lindsey Graham, Mitt Romney and Scott Walker) who lined up behind Ted Cruz as their preferred candidate.

There will be even less appetite to govern from the bipartisan political center, thus making it more difficult to secure sufficient buy-in for pro-growth structural reforms, better demand management and more timely solutions for excessively high levels of over-indebtedness.

There’s no doubt that the Panama Papers will produce greater efforts to reduce tax minimization (whether through legal avoidance or illegal evasion). That is good news for liberal democratic systems that rely on a rule of law that is viewed as fair and credible. But in the short-term this will be accompanied by even stronger resistance to the kind of political unity that is needed in several countries to deliver high growth and genuine financial stability.
Mohamed El-Erian is the chief economic adviser at Allianz SE. To read more of his blogs, go to: http://www.newsmax.com/Archives/MohamedEl-Erian/237/2015/12/

Image: Panama Papers Have Unintended Consequences

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