The concept of tax avoidance, which these professionals eloquently distinguish from tax evasion, must be refashioned. It is perfectly legal, the experts say, but that does not cut it any longer.
Pierre Moscovici, the European commissioner for economic and financial affairs, seems to agree, judging by his tweet: “Time to complete the EU’s anti-tax evasion toolbox with swift decisions.”
His colleague, Eva Joly, took it further: “If all this is ‘legal’, then it is necessary to change the laws."
To use a South Africanism, we can be grateful to whoever "touched the developed world on their tax revenue studio"; it looks like that long overdue change is about to kick in.
Africa has been denied its rightful dues under this pretext.
This is not the first spotlight on tax avoidance, including the recent High Panel on Illicit Financial Flows from Africa.
In 2011, the Joint AU Commission/UN’s Economic Commission for Africa created the panel to stem the flows, which were estimated to be no less than $50billion a year, at its Conference of African Ministers of Finance, Planning and Economic Development.
The panel leader, former president Thabo Mbeki, said the figure mainly comprised the proceeds of tax avoidance.
Professional services firms operate vibrant businesses under names like transfer pricing, which help multinationals domiciled in rich countries to siphon the bulk of their business revenue from poorer jurisdictions to their home countries via tax havens - exactly the types used by those fingered in the Paradise Papers.
It is not surprising that one of the people named, ace Formula One racing driver Lewis Hamilton, was able to use shell companies in the British Virgin Islands (BVI), the Isle of Man and Guernsey to eschew a £3.3million VAT bill in 2013. This was for his imported £16.5m Bombardier aircraft, brought into England from Canada.
The Guardian reports that an "Isle of Man customs hosted a private meeting with an EY (accounting firm) adviser during which details of the structure were discussed, and agreed to fast-track the paperwork".
Duties and levies are commonly used by countries to protect their local industries from cheaper imports.
They make the imports too expensive, thus coercing consumers to buy local. When such high-value imports as private jets are allowed into other jurisdictions without due tax being paid, social services take a knock.
Hamilton is not alone. The same reports somewhat exonerate him, claiming he might not have been aware.
Others, however, deny culpability.
One such is Nigerian Central Bank governor Godwin Emefiele. Nigerian online newspaper Premium Times reports that Emefiele “jointly owned the identified shell companies with Zenith Bank chairman, Jim Ovia”. The godfather of Nigerian banking, Ovia was “Emefiele’s boss at Zenith” and with whom “he appears to maintain close business ties”.
While professionals and commentators excuse this kind of conduct, poor countries of the world - read African - are getting the raw deal.
Since they are “twice as dependent on corporate tax revenues as rich countries”, according to Oxfam tax adviser Susana Ruiz, let us understand why the bolder among African leaders, for example, President John Magufuli of Tanzania, will slap multinationals like Acacia with $300m fines, while taking a 16% stake in their company.
Magufuli argues that Acacia should have paid all that to the people of Tanzania over the two decades of its operations.
This tax-avoidance web is too laced with riches and power.
Paradise Papers trace some links to US Commerce Secretary Wilbur Ross, Prince Charles and even Queen Elizabeth of England.
Since we all cannot resist the allure of occasional tax savings through offshore shell companies, perhaps only the likes of Magufuli can save us for the greater good.
* Kgomoeswana is the author of Africa is Open for Business, media commentator and public speaker on African business affairs. Twitter Handle: @VictrAfrica
** The views expressed here are not necessarily those of Independent Media.