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Iceland PM first casualty of Panama Papers

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Iceland’s Prime Minister Sigmundur David Gunnlaugsson is to resign, becoming the first casualty of leaked documents from a Panamanian law firm that have shone a spotlight on the finances of an array of politicians and public figures worldwide.

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The Panama Papers showed the premier’s wife owned an offshore company with big claims on Icelandic banks, infuriating many in his country who joined mass street protests calling for him to resign.

The more than 11.5 million documents, leaked from the Panamanian law firm Mossack Fonseca, have caused public outrage over how the world’s rich and powerful are able to stash their wealth and avoid taxes while many people suffer austerity and hardship.

Mossack Fonseca denies any wrongdoing and on Tuesday, Panama President Juan Carlos Varela’s chief of staff told a news conference that the government could retaliate after France announced it would put the Central American country back on its blacklist of unco-operative tax jurisdictions.

The official, Alvaro Aleman, said no Panamanian company had been found to have committed a crime.

He added: “We are not going to allow Panama to be used as a scapegoat by third parties. Each country (implicated) is responsible.”

Among those named in the documents are friends of Russian President Vladimir Putin, relatives of the leaders of China, Britain and Pakistan, and the president of Ukraine.

Gunnlaugsson quit ahead of a planned vote of no-confidence, hours after asking the president to dissolve parliament, a move that would almost certainly have led to a new election.

With the fallout from the leaks reverberating across the globe, British Prime Minister David Cameron also came under fire from opponents who accused him of allowing a rich elite to dodge their taxes.

And in China, the Beijing government dismissed as “groundless” reports that the families of President Xi Jinping and other current and former Chinese leaders were linked to offshore accounts.

The Australian Taxation Office has confirmed it is investigating 800 taxpayers linked to the firm.

US President Barack Obama said the Panama Papers showed tax avoidance was a major problem and urged the US Congress to take action to stop companies from taking advantage of loopholes allowing them to avoid paying taxes.

“We’ve had another reminder in this big dump of data coming out of Panama that tax avoidance is a big, global problem,” he told reporters.

In Britain, the leader of the opposition Labour Party demanded the government tackle tax havens, saying it was time Cameron stopped allowing “the super-rich elite” to dodge taxes.

Cameron was put on the spot by the leaks, which named his late father and members of the ruling Conservative Party among the list of clients who used Mossack Fonseca’s services.

Other leading figures and financial institutions responded to the leak with denials of any wrongdoing as prosecutors and regulators began a review of the investigation by the US-based International Consortium of Investigative Journalists and other media organisations.

Along with Australia, Britain, France, New Zealand, Austria, Sweden and the Netherlands are among nations that have started inquiries.

AAP

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