‘Paradise Papers’ shows note ban didn’t end black money: CPI-M

New Delhi, Nov 9 (IANS) The revelations in "Paradise Papers" of how the super rich stash their wealth abroad "effectively debunks the myth of the Modi government's fight against black money", the CPI-M has said.

"It has underlined the absurdity of the claim that demonetisation has neutralised black money," said an editorial in the CPI-M journal "People's Democracy".

"The generation of black money, the conversion of it into assets abroad, money lending and round-tripping -- are all revealed by the Paradise Papers. The fact is demonetisation has not made even an iota of difference to this process which goes on unhindered."

The editorial said the Modi government had announced that the multi-agency group set up to look into the earlier 'Panama Papers' list of entities would also probe the details of Indian entities provided by the Paradise Papers.

"What this means is that some of the income not disclosed by those in the list will be subject to taxes and penalties. Nothing more.

"The structure of setting up companies in the tax havens, shifting funds to them and money laundering of black money will not be investigated, or, questioned. Doing so would mean having to challenge financial investors and the very structure of predatory finance capital."

The Paradise Papers are a set of 13.4 million leaked financial documents from two companies based in Bermuda and Singapore which helped multinationals and the super rich to move their wealth to tax havens. The list includes 714 Indian entities and individuals.

The Communist Party of India-Marxist said what was needed were strong measures to prevent the use of tax havens which were allowed as legitimate business activity.

"Suitable laws and a regulatory framework have to be put in place to penalise offenders and plug all loopholes by which tax evasion is made possible. Confiscation of assets of those found guilty will act as a deterrent.

"To expect the Modi government, however, to do all this would be naive. This is a government at the service of corporate and international capital," the editorial said.

The CPI-M underlined that what the Paradise Papers revealed were not an aberration from how finance capital operates.

A report in September, co-authored by economist Gabriel Zucman, estimated that 10 per cent of global GDP or $7.8 trillion was held offshore. According to Zucman, 600 billion Euros of MNC profit was shifted to offshore havens in the last year alone.

"The super-rich and big corporates evade paying taxes in this manner depriving the countries of tax revenue which goes towards schools, hospitals and social welfare for its citizens. That this is legally permissible does not make it less ugly," the editorial said.